Ethiopia reveals more info on petroleum test production

Ethiopia reveals more info on petroleum test production

Oil & Gas

The Government of Ethiopia reveals additional information on the recent petroleum test production in the eastern part of the country, near Hilala gas discovery site in Somali Region Ogaden area.

Experts at the Ministry of Mines and Petroleum of Ethiopia told reporters on Friday that the latest test production of about 1,650 barrels of crude oil aimed at identifying the potential application and volume of the petroleum reserve.

“The crude oil we produced as a test is discovered near Hilala gas field. It is part of the testing process about the amount and potential application of the reserve and the like. In other countries they simply burn it at this stage. But we produced it safely without burning and avoiding environmental pollution as well,” said Ketsela Tadesse (PhD), Petroleum Licence and Administration Director at the Ministry of Mines and Petroleum of Ethiopia.

He noted that the test product is sold to companies, which were using imported coal and or furnace oil for road construction, for glass production. It is also stated that the crude oil production is tested by the same company, Poly-GCL of China, which is preparing to start production of gas in the same area after constructing a pipeline up to Djibouti Port.

The petroleum is sold produced and sold in domestic market during the first six months of Ethiopia’s current fiscal year started July 8, 2019.

“The construction of pipeline for the natural gas has not started so far. Meanwhile, most of the agreements related to the construction of the pipeline are completed. But still additional agreements are being negotiated, especially in relation to what kind of products should be produced from the gas, gas commercialization agreement, as well as how it will be marketed with local companies.

Construction of the pipeline will commence after such agreements are concluded,” Dr. Ketsela said, at a press conference the Ministry held on Friday.

He further noted that currently the Government of Ethiopia has engaged an international consultancy along with local experts in negotiation of Calub and Hilala natural gas commercialization with Poly-GCL. He noted that Government of Ethiopia plans to sell the gas in liquefied natural gas (LNG) form after refining it at Djibouti Port.

Out of the total oil revenue of the government 50 percent goes to the region the oil and petroleum is found, according to the the latest proclamation approved by the Lower House (House of Federation of Ethiopia), which will be implemented as of July 8, 2021. It is stated that 10 percent the 50 percent will be directed to the specific locality the the oil is found.

The federal government will get the remaining 50 percent out of which 25 percent will be invested in parts of Ethiopia which are not endowed with the natural resource.

The sedimentary regions of Ethiopia cover a significant portion of the country and comprise five distinct sedimentary basins; namely: the Ogaden, Abay (the Blue Nile), Mekele, Gambela and Southern Rift Basins, according to the survey of Ethiopian Geological Survey, the state agency.

In addition to Poly-GCL, a British company named NewAge has been working to start test production after announcing discovery of petroleum in Ethiopia. Gas shows were observed in six wells in the upper parts of the Adigrat Sandstone at depth interval of 2442 meters to 3414 meters. In the gas-condensate fields of Calub and Hilala, with respective estimated reserves of 2.7 trillion cubic feet and 1.3 trillion cubic feet, the main reservoir unit is the Adigrat Sandstone.