East Africa boom

Introducing the potential new petro-state of Ethiopia

April 15, 2013
Obsession
Energy Shocks
April 15, 2013

Tullow Oil, the UK company responsible for some of the biggest recent frontier petroleum discoveries in Africa and South America, may have broken open yet another new petro-state. It is Ethiopia, a long-troubled, largely agricultural nation that imports all its oil and gas.

The company announced today that it found hydrocarbons in the south of the country in a much-discussed geological formation that extends into Kenya and Uganda. Estimates are that the entire formation may hold 10 billion oil-equivalent barrels (one billion barrels is called a super-giant).

The next tasks are to figure out whether the Ethiopian basin–called South Omo—contains mostly oil or gas, and whether it is extractable in commercial volumes. At the moment at least, oil is worth much more. In the same announcement, Tullow said it also has “very encouraging” new results at a well called Ngamia further south in Kenya.

The find—if it proves to be commercial oil—could be pivotal as it would demonstrate an entirely new petroleum basin. Already East Africa is the biggest frontier oil play in the world, stretching from Mozambique to Tanzania, Kenya, Uganda and now possibly Ethiopia. Somalia is also being explored.

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