SouthWest Energy Agrees buy Petronas assets in the Ogaden

[Oxidant]

SouthWest Energy is pleased to announce that on 24 September 2010 it agreed to purchase from PETRONAS Carigali Overseas Sdn Bhd (PETRONAS Carigali), all of its oil and gas interests in Ethiopia. The transaction is expected to be completed during the first quarter of 2011 following the fulfilment of certain conditions precedent, including regulatory approval.

PETRONAS Carigali Overseas Sdn Bhd, which is the international exploration and production subsidiary of Malaysia’s national oil company, PETRONAS, is a party to five petroleum production sharing agreements (PSAs) for oil and gas exploration and production in Ethiopia. SouthWest Energy has agreed to purchase 100% of PETRONAS Carigali's interests in each of those PSAs. The blocks and contract areas covered by the PSAs are Blocks 3&4, 11&15, 12&16, 17&20 and the Calub & Hilala contract area. All of the blocks and contract areas are located southeast of Addis Ababa, in the Ogaden Basin, which covers 350,000 sq km and is the largest proven hydrocarbon bearing sedimentary basin in Ethiopia with proven gas reserves of 2-4 TCF.

"This is a fantastic opportunity for SouthWest Energy to expand its exploration and production activities in Ethiopia," said Tewodros Ashenafi, Chairman and CEO of SouthWest Energy. "This transaction will transform SouthWest Energy into the leading force in the Ethiopian upstream industry. We intend to develop these new blocks together with our existing blocks as quickly as possible and to work on developing transport solutions for hydrocarbons in the Ogaden Basin. This development will be a cornerstone not only for SouthWest Energy's future growth, but also for the oil and gas industry in Ethiopia."

Orrick, Herrington & Sutcliffe LLP is acting as SouthWest Energy's legal advisors on the transaction, and Standard Bank Plc is acting as SouthWest Energy's financial advisor.

About SouthWest Energy

SouthWest Energy (H.K.) Limited was formed in 2005 and is the only Ethiopian-owned company to successfully obtain an energy concession in Ethiopia. SouthWest Energy is currently developing Blocks 9, 9A and 13 in the Ogaden Basin under PSAs it entered into in 2005 and 2007. Further information about SouthWest Energy is available at www.sw-oil-gas.com.

[Oxidant]

Allah willing, the ONLF show no mercy to the Ethiopian company. It seems that all foreign Oil/Gas companies have left the Ogaden or are leaving. This will send out another real message if ONLF destroy and attack this companies interests

[EEGA9]

October 7, 2010 Press Release

The Ogaden national Liberation Front sees the so-called sale of “PETRONAS” concessions in the Ogaden to South Western Energy ( a Tigray TPLF owned enterprise) as a face-saving measure intended to hide Ethiopia’s incapacity to resolve the conflict in the Ogaden in a just way peacefully o through a negotiated settlement.

First, this act is a continuation of the previous practices of concessions granted to oil companies while systematically subjecting the ogaden people to deprivation and inhuman crimes in order to force them to forgo any rights to their land and resources. However, the difference now is that multinationals from abroad had seen through Ethiopia false claims of controlling the Ogaden and had opted out of the Ogaden. Therefore, the regime had been forced to hide behind its own company in order to cover up its inability to guarantee to companies access to what it does not own or control.

Ethiopia’s plan was to resort to scorched earth policy and mass transgression of the Human Rights of the Ogaden people, in order to loot and usurp the Ogaden Somali people of their land and natural resources.

Ethiopia sliced the whole Somali territory into 21 blocks and auctioned it without regard to the wishes and wellbeing of Ogaden people or the precarious ecology of the land. No other part of the so-called Ethiopia was subjected to such an inhuman and avaricious practice.

Secondly, South Western Energy is a company owned by the TPLF regime and its presence in the Ogaden is considered as an extension of regimes in the Ogaden and will not be tolerated. This regime has previously massacred innocent people civilians in the Ogaden in order to facilitate for South Western Energy to exploit Fossil fuel resources in the Ogaden and the Ogaden people hold this company equally responsible for the crimes committed against them.

Thirdly, the Ethiopian regime has closed all doors for a negotiated settlement of the Ogaden conflict, by engaging in deceitful practices, and claiming reaching meaningless peace deals with forged ONLF faction and other irrelevant groups. Consequently, the Ogaden will remain a war zone until Ethiopia changes its intransigent stand and accepts a genuine peace process under the auspices of a third credible international party. Therefore, companies that engage in oil exploration in the Ogaden are putting themselves in harm’s way, since collateral damages from the warring parties or other forms of insecurity are highly probable.

Finally, ONLF calls upon all interested parties in exploiting the natural resources of the Ogaden to in invest in just efforts that could encourage the international community to take decisive actions that will protect the rights of the Ogaden people and bring peace instead of fuelling the conflict by replenishing the coffers of the aggressor, the Ethiopian regime.

Ogaden National Liberation Front

[EEGA9]

ONLF scores huge Victory against Ethiopia

"Multinationals flee Ethiopia oil fields"

afrol News, 8 October - After Malaysia's Petronas this week sold out its oil and gas interests in Ethiopia's turbulent Ogaden region to the Ethiopian-owned company SouthWest Energy, rebels in the Ogaden today claim an important victory.

The Ogaden region in eastern Ethiopia, a sparsely populated area dominated by the Somali people, holds the country's largest proven hydrocarbon bearing sedimentary basin. Proven gas reserves are at 2-4 trillion cubic feet, but poor infrastructure and political instability has led to a slow development of the fields.

Oil and gas exploration in the Ogaden so far has been headed by the Malaysian company Petronas and the Vancouver-based Africa Oil Corporation. Ogaden rebels have on several occasions pressurised the foreign companies to leave the region.

Today, the Ogaden National Liberation Front (ONLF) claims its campaign against the "multinationals" has seen its first success. The rebels doubt that a real, market-based "sale" has taken place.

Petronas had opted to leave Ethiopia and the take-over by Hong Kong-based but Ethiopian-owned SouthWest Energy was only "a face-saving measure" by government, an ONLF statement claims. The intention was "to hide Ethiopia's incapacity to resolve the conflict in the Ogaden in a just way peacefully or through a negotiated settlement," the statement added.

SouthWest majority owner Tewodros Ashenafi, on the other hand, says the deal with the Malaysians was stroke already on 24 September on his company's initiative. "This is a fantastic opportunity for SouthWest Energy to expand its exploration and production activities in Ethiopia," commented Mr Ashenafi.

The transaction would transform SouthWest into "the leading force in the Ethiopian upstream industry," he added. The company now was to work on developing transport solutions for hydrocarbons in the Ogaden Basin. "This development will be a cornerstone not only for SouthWest Energy's future growth, but also for the oil and gas industry in Ethiopia," Mr Ashenafi said.

Petronas has not made any statements about why it decided to sell all its Ethiopian assets. However, reports in the Malaysian press indicate that the state-owned company was disappointed by the drilling results. The discoveries, although substantial, were not great enough to defend further infrastructure investments in the remote area.

Surely, constant pressure from the Ogaden rebels and steadily increasing security costs and efforts may have contributed to Petronas' decision.

For the ONLF, the decision in any case is a propaganda victory. Foreign companies had now "seen through Ethiopia false claims of controlling the Ogaden and had opted out of the Ogaden. Therefore, the regime had been forced to hide behind its own company in order to cover up its inability to guarantee to companies access to what it does not own or control," the rebels hold.

The Ogaden rebel movement again pointed to human rights abuses and "massacres" committed by the Ethiopian army in the province in connection with oil exploration - a claim partly sustained by research done by Human Rights Watch. The Ethiopian government forcefully has rejected these claims.

By staff writer

© afrol News

[Oxidant]

A rebel group operating in Ethiopia said the sale by Malaysia’s Petroliam Nasional Bhd. of energy concessions in the country showed the government’s lack of control of the restive eastern region.

SouthWest Energy (H.K.) Ltd., which according to its website is an Ethiopian-owned company based in Hong Kong, said on Oct. 6 it acquired all of Petronas’s interests in the Ogaden basin, which has proven gas reserves of as much as 4 trillion cubic feet. Owners of SouthWest include members of the Tigrayan People’s Liberation Front, one of the main factions in Ethiopia’s ruling party, the renegade Ogaden National Liberation Front said in an e-mailed statement on Oct. 8.

The government has been “forced to hide behind its own company” because of its lack of control of the ethnic-Somali region, the ONLF said.

Ethiopia’s government denied the company is owned by members of the ruling party. “The ONLF’s assertions are false,” Adam Goldberg, spokesman for SouthWest Energy, said in an e- mailed response to questions. “SouthWest Energy has U.S., U.K. and other Western investors, and the TPLF has no ownership stake or any other association with SouthWest Energy.”

Ethnic Somali rebels from the ONLF are seeking independence for Ethiopia’s Ogaden region, an arid area twice the size of England largely inhabited by nomads. In April 2007, the group attacked an exploration site in the Ogaden operated by China’s Zhongyuan Petroleum Exploration Bureau, killing nine Chinese workers and 65 Ethiopians.

Counterinsurgency

The attack triggered a counterinsurgency campaign by the Ethiopian army in the second half of 2007. Ethiopia considers the ONLF a terrorist organization backed by neighboring Eritrea.

“SouthWest Energy believes that its investments in the Somali region of Ethiopia are the best solution for the region’s sustainable development, and it will continue to closely consult with clan elders and community leaders about the environment and other regional issues,” Goldberg said.

Both the Ethiopian government and the ONLF have previously claimed battlefield victories and accused each other of atrocities. Verification of the reports is difficult as the Ethiopian government bars foreign journalists from traveling independently in the region, much of which is under military administration.

Ethiopia “has clearly weakened, if not defeated the insurgency” in the area, judging by the lack of major incidents since the 2007 attack, J. Peter Pham, senior vice president on the National Committee on American Foreign Policy, said in an e- mailed response to questions.

‘Window of Opportunity’

The ONLF’s “degraded” operational capacity is a “window of opportunity” for Ethiopia to put an end to the conflict “once and for all,” Pham said. That would “open the way for the development of the natural resources,” he said.

Shimeles Kemal, a spokesman for the Ethiopian government, said the state will sign a peace agreement with a “major faction” of the ONLF led by Salahdin Maow in Addis Ababa tomorrow. The faction represents about 80 percent of the ONLF’s fighting force, he said.

The Maow group has not conducted military attacks in the Ogaden and is “largely an exile organization,” David Shinn, a former U.S. ambassador to Ethiopia, said in an e-mailed response to questions on Oct. 8.

Petronas, the state-owned oil company, said in an e-mailed statement the sale of the assets in the Ogaden is “part of our overseas E&P assets rationalization exercise, in line with our strategy to build a robust international portfolio.” It didn’t elaborate.

Ketsela Tadesse, head of petroleum licensing and administration at the Mines and Energy Ministry, said the agreement between SouthWest and Petronas has yet to be ratified by the government.

“There is a clause in the contract for the concession to be transferred, but it needs to be approved by the ministry and by high officials,” Ketsela said by phone on Oct. 8.

To contact the reporter on this story: William Davison in Addis Ababa via Johannesburg at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

[EEGA9]

Dr.J pham , most anti-Onlf sources come from him.He's a paid Ethiopian lobbyist, even Amb.David Shinn who was once like him has seen the light.Nevertheless the resources are safe and they were never a huge problem but ONLF was scoring points on the international stage.