The Production Sharing Agreement (PSA) for the block was signed today in Addis Ababa between PETRONAS and Ethiopia's Ministry of Mines. PETRONAS was represented by its Vice President of Exploration & Production Business Dato' Shamsul Azhar Abbas, while the Ethiopian Government was represented by Minister of Mines Mohamoud Dirir Ghedi.
Block G, which covers an area of 15,356 square kilometres, lies within the Gambela Basin and is located in the western part of Ethiopia. Under the PSA, PETRONAS Carigali Overseas Sdn Bhd (PCOSB), the overseas exploration and production arm of PETRONAS, will conduct geological and geophysical studies on the block, acquire 800 kilometers of 2D seismic data and drill one exploration well during phase one of the block's exploration stage. PCOSB's financial commitment for this initial exploration stage is US$5 million. Under the terms of the PSA, PETRONAS will also provide technical training to a group of Ethiopians in Malaysia in the area of upstream operations and related fields.
At the PSA signing ceremony, PETRONAS and the Ministry of Mines also inked a Heads of Agreement (HOA) where PCOSB will conduct geological and geophysical studies on the Ogaden Basin, another gas-prolific area in Ethiopia. The basin covers an area of about 350,000 square kilometers and is known to have considerable gas deposits, including a discovered field with a reserve of 2.7 trillion standard cubic feet that is not part of the area specified in the HOA. The HOA will provide PCOSB exclusive rights to acquire exploration acreage in the basin after the completion of the study.
The award of the contract for Block G and the signing of the HOA were the results of direct negotiations between PETRONAS and Ethiopia's Ministry of Mines early this year. The award of the block adds to the PETRONAS asset portfolio in line with its growth strategy in Africa. In other parts of Africa, PETRONAS is already operating in Algeria, Angola, Benin, Chad, Cameroon, Egypt, Equatorial Guinea, Gabon, Mauritania, Morocco, Mozambique, Niger, Sudan and Togo.
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