Ethiopia could emerge as a major oil player if the billion-plus barrels of oil believed to lie underground are present, tapped, and successfully moved into production.

That is what SouthWest Energy is hoping for as it delves deeper into exploration plans in Ethiopia’s Gambella and Jijiga basins.

Currently, no commercial quantities of oil are produced in Ethiopia. However, results of a report ordered by the company show together the basins could contain as much as 2.9 Bbbl of oil. But getting to that oil could prove challenging.

“In [the] Gambella basin, the topography (dense forests, wetlands), the weather leaves us with a narrow operating window, and lack of infrastructure will be operational challenges,” SouthWest Energy CEO Tewodros Ashenafi told Hart Energy. “But we’re confident that we can overcome them.”

The basin, adjacent to the South Sudan border, already has proved itself in Sudan with more than 15 oil and gas discoveries, according to SouthWest Energy.

An extension of South Sudan’s Melut basin is currently producing 350,000 b/d, and gravity maps show the Gambella basin as an extension of Melut basin with both showing similar rift settings. That gives SouthWest more confidence that the basin could be promising for hydrocarbons.

“In the Jijiga basin, we have already proved that we have overcome the operational and technical challenges of working in that region,” Ashenafi added. “We have the experience so we don’t anticipate any new challenges going forward.”

Field work in the Jijiga basin, the country’s largest proven hydrocarbon-bearing basin, has included field rock and soil samplings, geological structural and basin modeling, and seismic acquisition. “We’ve completed a lot of work in the Jijiga basin, including 1,500 km (932 miles) of 2-D seismic acquisition, 19,000 km (1,181 miles) of FTG data acquisition, and numerous rock and soil samplings,” Ashenafi said. “All the data collected and its results have led us to be confident about the hydrocarbon potential of the area.”

The Competent Persons Report conducted by independent consultant Senergy (GB) Ltd. estimated the Gambella and Jijiga basins could have between 1.56 Bbbl and 2.9 Bbbl of oil. Senergy based the estimated on 16 potential traps in 29,000 sq km (11,197 sq miles) in the Jijiga and eight traps in 17,000 sq km (6,564 sq miles) in the Gambella.

“The report confirms what we have always believed; our blocks have strong oil potential,” Ashenafi said in a prepared statement. “Our work now turns to the next phase of exploration, to further refine the seismic dataset and look towards our well program, which we hope to commence later this year.”

Currently, SouthWest is raising US $100 million to fund the next phase, which includes a three-well drilling program in the Jijiga basin later this year.

Establishing partnerships to help open the Gambella and Jijiga basins is an option SouthWest has considered, having had talks with several potential partners. Ashenafi noted that some of them approached the company; however, he would not give specifics.

Overall, the East Africa region is home to several recent discoveries, solidly placing itself among world’s newest frontiers. Analysts have said that not only oil but also gas discoveries in Ethiopia could reach commercial quantities, which would create another challenge – putting in place needed infrastructure.

SouthWest is not the only oil and gas company seeking pay in Ethiopia. The UK’s Tullow Oil and Canada’s Africa Oil Corp. also have established presence there among others.

Africa Oil has four projects underway. “The Ogaden basin area blocks are relatively underexplored with limited well and seismic data to constrain the petroleum system proved by the Calub and Hilala fields to the east,” according to an overview on the company’s website. “The Adigala block is a wildcat opportunity, with no wells in the area. An analogue petroleum system is predicted based on nearby outcrop data and field surveys.

“The South Omo Block Area is within the Tertiary age East African Rift, just north of Lake Turkana, Kenya, and within the same petroleum system as the company’s Kenya Block 10BB and Tullow’s Uganda discoveries.”

Tullow stepped into Ethiopia in 2011, but has been met with challenges recently with its Sabisa-1 well in southern Ethiopia. The well encountered hydrocarbons; however, Tullow said hole instability issues have required the company to drill a sidetrack to log and sample zones.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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