Ethiopia began on Thursday its first-ever crude oil production under a test production scheme that will see initial production of 450 barrels of oil per day.
Ethiopia, a rather large country in east Africa, started production from oil fields in its southeast today.
On Wednesday, Fitsum Arega, Chief of Staff of Ethiopia’s Prime Minister Office, said that Ethiopian Prime Minister Abiy Ahmed met with representatives of the company Poly-GCL Petroleum Investment Limited “to officially kick start crude oil production test in Ogaden Region. The company has discovered that there is a prospect of commercial quantities of crude oil in the region.”
Poly-GCL Petroleum Investment is a joint venture of state-owned China POLY Group Corporation and the Hong Kong-based company Golden Concord Group.
Prime Minister Abiy Ahmed said that Poly-GCL Petroleum Investment Limited would start producing 450 barrels of crude oil a day as of June 28, state-affiliated Fana outlet reports.
Ethiopia also plans to start in September the construction of a pipeline that would export natural gas via Djibouti, Ethiopia’s neighbor to the northeast that lies on the Bab-el-Mandeb Strait. The strait is located between Yemen on the Arabian Peninsula and Djibouti and Eritrea in the Horn of Africa, connecting the Red Sea with the Gulf of Aden, and a major sea route for crude oil from the Middle East. Related: How Important Are Egypt’s Gas Discoveries?
The construction of the natural gas pipeline via Djibouti will take two years, Fana quoted the Ethiopian prime minister as saying.
Once Ethiopia starts exporting natural gas at full capacity, it hopes to earn US$8 billion a year, PM Ahmed said.
Crude oil and natural gas income could help Ethiopia in the future to reduce unemployment and ease its foreign currency shortage, Ahmed noted.
Earlier this month, the United Arab Emirates (UAE) pledged US$3 billion in aid and investments to Ethiopia, including depositing US$1 billion in Ethiopia’s central bank to ease the severe foreign currency crunch.
By Tsvetana Paraskova for Oilprice.com
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