Petronas moves to new exploration site
Saturday, 20 February 2010
By Kaleyesus Bekele Ethiopian Reporter
The Malaysian oil and gas giant, Petronas, which is prospecting for oil in the Ogaden basin in the Somali regional state is moving its drilling crew from Genalle to Hilala exploration site.
After drilling one exploration well in Genalle, western part of the Ogaden basin, that turned out dry, Petronas has abandoned the site and is now moving to another exploration site, Hilala.
The Ogaden basin is a vast arid land in the remote eastern part of Ethiopia. The sedimentary basin has a total area of 250,000 sq.m. Since the sedimentary basin has an equivalent age similar to the geological formation with that of oil productive basins in the Middle East it has been considered as the most promising area for oil reserve discovery.
Dozens of foreign oil companies at different times have been engaged in oil exploration activities since the 1950s in the Ogaden basin.
To date 47 exploration wells were drilled at different sites by various companies in the basin. The collection of seismic data was conducted on more than 20,000-km-long lines. Various useful geological data were collected by different companies, among others, the American company, Tenneco, and the Soviet Petroleum Exploration Expedition (SPEE).
In 1972, Tenneco discovered a natural gas reserve in Calub locality, 1,200 km south-east of Addis Ababa. The natural gas reserve in Calub is estimated at 76 billion cu.m. Tenneco also discovered a non-commercial crude oil reserve with a thickness of one meter at Hilala. The well ( Hilala 1) which is 4116 deep has a production capacity of 35 barrels per day, according to studies.
After Tenneco was expelled by the socialist government, SPEE drilled more wells in Calub and Hilala localities and confirmed the natural gas reserve in Calub. SPEE discovered a gas condensate at Hilala 4 at a depth of 4,750 m. The gas reserve at Hilala is estimated at 42 billion cu.m. Tenneco drilled other exploration wells in El-Kuran, Bodle, Magan, Callafo and Ghebri localities.
A total of 14 wells were drilled in the two localities - ten in Calub and four in Hilala. Eight of the wells in Calub were made ready for gas production by a Chinese company, Zhoungyan Petroleum Exploration Bureau (ZPEB), in 1995.
SPEE, in addition to Calub and Hilala, conducted seismic survey and drilled exploration wells in Magan, Tulli, Faf and Shillabo localities. Oil and gas shows were noted in some of the wells.
The Calub and Hilala gas fields are found in Block 11 and 15 which are considered by experts of MME as the most prospective areas for more discoveries.
Petronas has been prospecting for oil in the Ogaden basin since 2005. Petronas acquired three blocks - Genale, Callafo and Wel Wel-Warder - in 2005 from the Ethiopian Ministry of Mines and Energy (MME). Later, the company acquired Block 11 and 15. In June 2007, the company signed an agreement with the ministry to develop the Calub and Hilala gas fields and made an upfront payment of 80 million dollars to the Ethiopian government.
The company planned to build a gas treatment plant and to construct a gas pipeline all the way from the gas fields to the port of Djibouti. The total investment is estimated at 1.9 billion dollars. However, work on the gas field development project has not yet commenced for various reasons, including security issues.
However, Petronas has been undertaking various exploration activities in its concessions that lie on 93,000 sq.m of land. Reliable sources told The Reporter that the company is now moving its drilling crew to Hilala and is establishing a camp at the new site. Petronas has hired a Dubai-based company, Weather Ford, which collects seismic data and drill exploration wells on a contractual basis. “Hilala has an immense potential,” sources told The Reporter. “Considering the previous discoveries of gas condensate and crude oil, we hope for more fruitful results,” they added.
