Ethiopia Launches Test Crude Oil Production


Poly-GCL Petroleum Investment Limited today officially kick start crude oil production test in Ogaden Region of Ethiopia. The test production came after the heads of the company have met with Prime Minister Dr Abiy Ahmed yesterday. The two have talked about the prospect of commercial quantities of crude oil in the region.

The news comes at a critical time Ethiopia is battling with a foreign exchange shortage. If all goes well the country expects to earn about one billion dollars annual hard currency from export of the oil, according to Prime Minister Abiy, who stressed that his government will not allow oil production to distract the nation from focusing on the existing economic sectors, such as agriculture and industrial development.

The company has also been working to start gas production and is expected to commence in the coming two years after the pipeline between Ethiopia and Djibouti will be completed.
The company has taken over the project from Petrons Company of Malaysia, which was working on the project since August 2007 till it has left after a dispute with Ethiopian government.

The project location is also remembered for the death of 74 Ethiopian and Chinese, who were victims of the armed group Ogaden National Liberation Front (ONLF) attack of April 2007.
Along with a few rebel groups operating in Ethiopia, the ONLF, which was named by Ethiopian government as terrorist group is now welcomed by the new administration led by Prime Minister Dr. Abiy Ahmed to be engaged in peaceful talks.

meanwhile the ONLF opposes the commencement of crude oil production int the region with its statement that followed the news.

“…The party expressed its disapproval of the starting of oil production testing in Ogaden. ONLF demands a referendum and then negotiation with the government of Ethiopia before any exploration or production. This announcement poses a serious challenge to the PM’s calculus in transforming the conflict and political repression in the Somali region,” Mesfin Negash, exiled journalist who was one of the founders of Addis Neger newspaper, commented on FB.

Poly-GCL Petroleum Investment Limited is Chinese Company with a subsidiary company named Poly Central Africa Petroleum Company, registered in a tax haven British Virgin Island some three years ago, according to the offshore leaks database of the International Consortium of Investigative Journalists (ICIJ).\

Oil exploration in Ethiopia has about a century old history. The first exploration license for the then Harrarge province was granted in 1915 and subsequently transferred the Anglo American company, a London subsidiary of Standard Oil Company, ultimately incorporated into Esso.

The first oil seep in Ethiopia was reported in 1860 and by the 1920s the prolific seeps of oil in the Red Sea coast were widely known. Early reports refer to oil seeps in the Ogaden basin: in the Gara Mulatta mountains near Harrar, in the Fafan and Gerger river valleys and near Jijiga.

Including Africa Oil, which also operating in other African countries, currently several companies are engaged in oil exploration in different parts of the country.

With blocks in the North East, South East and South West of the country, Africa Oil Ethiopia operates those in Adigala and the Rift Basin Area and is Joint Venture partner in both South Omo and the Ogaden.


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