Ethiopia+Natural+Gas

=Ethiopia's Revocation of Petroleum And Mineral Licenses To PetroTrans Company Ltd And Security Threats In Ogaden Basin Make Chinese Investments In Ethiopian Natural Gas Unlikely Over The Next Five Years=

Executive Summary:
Despite initial estimates of Ethiopia's natural gas reserves of 4 trillion cubic feet in the Ogaden Basin, it is unlikely Chinese natural gas investors will invest in the area, because of the high security threats associated with the basin as well as Ethiopia's Ministry of Mines revoking of Chinese PetroTrans Company Ltd license in 2012. PetroTrans invested millions of dollars in the risky Culab and Hilala blocks in the Ogadin Basin. Rebels attacked the basin in 2007, killing nine Chinese and 65 Ethiopians who were part of an exploration team, effectively shutting down drilling and exploration activity by the Chinese in the region until 2011.

Discussion:

 * 113 billion cu m (1 January 2011 est.).
 * July 23, 2011 - The Ministry of Mines yesterday awarded the Calub and Hilala natural gas fields and eight exploration blocks found in the Ogaden basin to a Chinese oil and gas company, PetroTrans Company.
 * The company will pay the Ethiopian government an upfront payment of USD 130 million and will invest up to four billion dollars on the gas development project.
 * Five production-sharing agreements signed on July 22, 2011, with [|PetroTrans Co.] for 10 blocks in the Ogaden area of the region, which include the Calub and Hilala fields with natural gas resources estimated at 4 trillion cubic feet, were canceled on July 1.
 * Rebels plague this field causing security concerns.
 * The country has six exploration basins covering 350,000 square kilometers (135,136 square miles),
 * Ethiopia revoked petroleum and mineral licenses in 2012. One of the major companies that have been affected by the decision and kicked out of the country was the Hong Kong based oil and gas giant, PetroTrans Company Ltd that has been investing heavily in the last few years on the dangerous and greatly risky region of the Ogaden basin.
 * After a year, in July 2012, the Ministry cancelled the petroleum development agreement it had signed with PetroTrans, saying the company has failed to commence work on the project according to schedule. In a letter dated 1st July 2012 and signed by Mines Minister Sinkenesh Ejigu, the Ministry notified PetroTrans of the termination of the petroleum development agreement. The company had agreed to develop the gas fields within three years. PetroTrans furiously protested the Ministry's decision.