ETHIOPIA: POLY-GCL Kicked Out of Ogaden Basin

Chinese explorer POLY-GCL has had its operations licence in Ethiopia’s Ogaden basin canceled according to Ethiopia’s Minister of Mines and Petroleum, Takele Uma.

This follows the company’s failure to meet a list of conditions set out by the Ministry in March in which the government warned lack of compliance would lead to “termination of the PPSAs… without a need for further notice.”

POLY-GCL had despite carrying out tests on crude oil production in 2018 at the Hilala Oil fields with oil in place reserve of about 46 million tonne failed to meet timelines for the project. In June 2018, the first barrel of crude oil was produced with a daily output of 90 tonnes.

The Ogaden basin also has three gas fields are sufficient to support the steady production of first phase 3 million tonne of LNG project for 20 years

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected.”

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected. As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” the minister said in a post on twitter.

POLY-GCL’s Ethiopia-Djibouti oil and gas” project business, included four major parts: oil and gas exploration and development, long-distance pipelines, natural gas chemical plants and terminal construction. The extracted natural gas was to be transported from Ethiopia to Djibouti through pipelines, liquefied in the Djibouti chemical plant or made into chemical products such as liquid ammonia and methanol, and then shipped to China and other end markets around the world.

The project was one of the largest energy projects along the belt and road in the continent.