From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Thu Mar 11 2010 - 05:44:30 EST
East Africa is next hot oil zone
NAIROBI, Kenya, March 11, 2010 (UPI)
is emerging as the next oil boom following a big strike in Uganda's Lake
Albert Basin. Other oil and natural gas reserves have been found in Tanzania
and Mozambique and exploration is under way in Ethiopia and even war-torn
Somalia.
The region, until recently largely ignored by the energy industry, is "the
last real high-potential area in the world that hasn't been fully explored,"
says Richard Schmitt, chief executive officer of Dubai's Black Marlin
Energy, which is prospecting in East Africa.
The discovery at Lake Albert, in the center of Africa between Uganda and the
Democratic Republic of Congo, is estimated to contain the equivalent of
several billion barrels of oil. It is likely to be the biggest onshore field
found south of the Sahara Desert in two decades.
Tullow Oil, the British exploration company backed by a $1.4 billion loan
from the Royal Bank of Scotland, says its Ngassa field in Uganda may be the
biggest find in the Lake Albert Basin to date with up to 600 million
barrels.
Tullow has discovered reserves equivalent to around 2 billion barrels of oil
in Uganda in the last four years. Most of the initial finds in East Africa
were made by independent wildcatters like Tullow and another British firm,
Heritage Oil, run by former mercenary Tony Buckingham.
Now the majors are moving in. Heritage recently sold its 50 percent share in
two Lake Albert Basin fields to Eni of Italy for $1.5 billion.
Eni said the two blocks have the potential to produce 1 billion barrels and
is fighting it out with Tullow for control of the reserves on the Ugandan
side of Lake Albert.
The Italian company is busy expanding in sub-Saharan Africa and has
interests in Angola, Nigeria, Gabon, Mozambique and the Republic of Congo.
The Ugandan government is negotiating with several majors with the financial
clout to handle the enormous investment required to develop these emerging
fields.
Front-runners reportedly include China's state-run CNOOC, Total of France
and Exxon Mobil of the United States.
Andarko Petroleum Corp. of Texas says it has hit a giant natural gas field
off the coast of Mozambique, a former Portuguese colony that became
independent in 1975. Norway's Statoil is drilling in Mozambique's Rovuma
Basin.
Since the 2006 find at Lake Albert, one of the Great Lakes of Africa strung
out along the Great Rift Valley, there have been at least 15 confirmed major
strikes in the region.
The Indian Ocean island of Madagascar contains "enormous reserves,"
according to Tiziana Luzzi-Arbouille of IHS Global Insight consultancy of
London.
"What happened in Uganda made it easier for smaller companies to raise
funding," said Tewodros Ashenafi, head of Southwest Energy, an Ethiopian
company exploring in the Ogaden Basin in the east of the country.
This is a vast 135,000-square-mile territory in landlocked Ethiopia that is
believed to contain sizable reserves of oil. It is estimated to hold 4
trillion cubic feet of natural gas as well.
Malaysia's Petronas, which recently acquired major blocks in Iraq, signed an
exploration agreement with Addis Ababa in August 2007.
The main problem for the oil industry is that the Ogaden, like many parts of
Africa, is a conflict zone, as it has been pretty much since the Cold War in
the 1970s. This is one reason why exploration has been so tardy.
Separatist rebels of the Ogaden National Liberation Front have warned oil
companies to keep away and in April 2007 attacked a Chinese exploration
group, killing 74 people.
Petronas is also exploring in the Gambella Basin of western Ethiopia.
Somalia has been torn by wars between feuding militias and clans since
dictator Siad Barre was toppled in 1991 but it is also considered to hold
considerable oil reserves.
A 1993 study by Petroconsultants of Geneva concluded that Somalia has two of
the most potentially interesting hydrocarbon-yielding basins in the entire
region - one in the central Mudugh region, the other in the Gulf of Aden.
That was one of 10 such basins across Somalia, southeast Ethiopia and
northeast Kenya.
More recent analyses indicate that Somalia could have reserves of up to 10
billion barrels.
But exploration remains an extremely hazardous undertaking. And it's likely
to become more so as the country becomes a major focus for U.S.
counter-terrorism operations against al-Qaida and its affiliates who are dug
in there.
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