Drilling for oil will begin in the Great Rift Valley in the South Omo region of southwest Ethiopia in the third quarter of 2012. An expert in the office of the relevant oil company, London-based Tullow Oil, said it was “highly likely” that drilling would commence in September. The company had previously found substantial quantities of oil in Kenya and Uganda. Tullow has a 50 percent stake in multiple licenses in Ethiopia and Kenya and production sharing agreements and licenses in 83 other countries in Africa, Europe, South America, and South Asia.
South Omo is considered to be prone to natural disasters. It suffers torrential rains and its infrastructure is weak and in places non-existent. It contains no less than 12 different ethnic groups, and possibly as many as 21. A report for the CondÃ‰ Nast Traveler magazine said that a visitor would feel like a “human ATM.”
Exploring Oil in Gambella
While an exploratory oil well in Gambella was found to be dry in 2006, the region was recently described by Tewodros Ashenafi, the chairman of the Ethiopian oil company, SouthWest Energy, as “exactly the same” as the oil-rich Muglad Basin of South Sudan where six billion barrels of oil are believed to exist. Gambella is the location of the Gambella National Park.
Challenges at the New Oil Exploration Region Ogaden
In the Ogaden region of Ethiopia, $50 million has already been spent, although wells and seismic data are limited. The Ogaden National Liberation Front (ONLF) has fought for self-determination for 28 years. Ogaden is populated mostly by ethnic Somalia. Rebel fighters have attacked oil company workers in the past. In an attack earlier this year on an exploration site owned by China’s Zhongyuan Petroleum Exploration Bureau, nine Chinese and 65 Ethiopian workers were killed.
The Malaysian oil and gas behemoth, Petronas, withdrew from Ogaden after a British geologist working on oil exploration was killed. The ONLF did not take responsibility and the government did not accuse it. SouthWest, however, spent a million man hours surveying Ogaden with no accidents or injuries. Oil produced there would likely be exported through a pipeline to the coast of Somaliland, an autonomous region in the north of Somali, which is 75 miles distant.
Expectations of Oil Flow in Ogaden, South Omo and Gambella
It is expected that oil from Ogaden would be light in sulfur and so easier to regime, while oil from South Omo and Gambella would be waxy and therefore require chemicals to make it flow. Ashenafi, the chairman of SouthWest Energy, said that as much as $3 billion might be required for the necessary infrastructure in Ethiopia, and “that can only be done by the big boys.” Negotiations with major oil companies have been conducted. Ashenafi said he thought there might be two or three billion barrels of oil in Ethiopia.
Ethiopia suffered a devastating and widespread famine from 1983 to 1985 which sadly resulted in several years of drought and poor security conditions. The country currently relies on coffee and other agricultural products for most of its foreign exchange earnings, so oil would be a great boon for the entire population. The impoverished South Omo region would be transformed, and there would likely be less anti-government sentiment in Ogaden.