SouthWest Energy has 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."
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