ADDIS ABABA, Dec 10 (Reuters) – Malaysia’s Petronas and China’s Sinopec remain in talks to resume oil and gas prospecting in Ethiopia’s Ogaden region, where rebels killed Chinese workers in April, the Ethiopian government said on Monday.
Exploration in the remote area halted after separatist rebels killed 74 people, including nine Chinese employees of Zhongyuan Petroleum Exploration Bureau (ZPEB), part of Sinopec, China’s biggest refiner and petrochemicals producer.
“We hope the two sides will reach an agreement and resume exploration work in the Ogaden because the situation has changed and there is no security threat now,” Sinknesh Ejigu, Ethiopia’s Woyanne state minister for mines and energy, told Reuters.
ZPEB exploration equipment was sitting idle at the site of the April 24 guerrilla attack near Degabur, 630 km (390 miles) east of the capital Addis Ababa, she said.
The pre-dawn raid by Ogaden National Liberation Front (ONLF) rebels was one of the worst on Beijing’s growing energy interests in Africa, and it prompted a major military crackdown by the Ethiopian army that began in June. In September, Ethiopia’s government said the violence had not deterred Sinopec, and that the Chinese company had expressed renewed interest in negotiating energy production-sharing deals.
The government believes the Ogaden basin, which covers 350,000 sq km (135,100 sq miles), contains gas reserves of some 4 trillion cubic feet. It has assured firms operating in the vast, barren area bordering Somalia that security has been stepped up.
An Ethiopian A Woyanne official said in August that the country had signed a deal allowing Malaysian state company Petronas [PETR.UL] to develop natural gas in the Ogaden region.
Sinknesh said on Monday that Sweden’s Lundin (LUPE.ST: Quote, Profile, Research) had started surveying four Ogaden blocks, while PEXCO — another Malaysian firm — was about to begin exploration in the area. (Editing by Daniel Wallis, editing by Anthony Barker)