Ministry of Mines, Petroleum and Natural Gas of the Federal Democratic Republic of ...€¦ · ·...
Transcript of Ministry of Mines, Petroleum and Natural Gas of the Federal Democratic Republic of ...€¦ · ·...
Ministry of Mines, Petroleum and Natural Gas of the Federal Democratic Republic of Ethiopia
Biruk Berhanu
May , 2016
Outline of the presentation Back ground
Petroleum Licensing
Petroleum Potential
Ethiopian Gas export project
Available Opportunities
Conclusion
Background Location: Ethiopia is located in the Horn of Africa
Neighbors : Kenya, Somalia, Sudan,
South Sudan, Djibouti &Eritrea
Surface Area: 1.13 million km2
Climate: Two seasons;
Dry season:- Oct. - May
Wet season:- June - Sept
Population: > 90 million
Capital City: Addis Ababa
Economic growth: Double digit growth
for the past 10 Years.
Investment Policies Conductive investment polices are already established
for the various sectors in Ethiopia.
The Government issues licenses and administer the contracts in accordance with the agreements through the Licensing Authorities. There are three Regulatory directorates under the MoMP&NG:
I. Mineral Licensing & Administration Directorate
II. Petroleum Licensing & Administration Directorate
III. Petroleum Downstream Operations Regulatory Directorate
Petroleum Licensing Policies For a single interest- one to one negotiation can be
carried out after the proposal submission to the Minister(MoMP&NG)
If more than one company interest for a block exists, bid round will be floated.
Notice will be floated on the “ Ethiopian herald’’- the English version of the Ethiopian National News Paper.
The notice will also be floated in the Ministry’s website http://www.mom.gov.et
Licensing
Bid documents will be prepared and can be collected from the Ministry.
The notice will stay at least for 45 days
The beginning and ending dates will be specified
Evaluation will follow based on the scored cards set at the beginning
The winner will be notified officially to all bidders
Signing date will be fixed with the winner
Signing ceremony with the Minister and authorized company representative will be followed.
Licensing If there is only one interest
Negotiation will be carried out between the company team and MoMP&NG team.
When agreement is reached on various fiscal terms and articles of the PPSA, report will be submitted to the Ministers office.
The PSA will be endorsed by the Council of Ministers
The Council of Ministers, Chaired by the PM will approve the PPSA.
After the approval of the Council, the Minister and the authorized company representative will sign the agreement
Fiscal Regime The Petroleum Laws/ Proclamations
The Petroleum Operations Proclamation-295/1986
The Petroleum Income Tax Proclamation-295/1986
The Petroleum Income Tax Proclamation (amendment) -295/1986
The Proclamation to Regulate Petroleum and Petroleum Products Supply Operation
Types of Agreements Petroleum Production Sharing Agreement(PPSA)
Petroleum Development Agreements( PDA)
Joint Study Agreements ( JSA)
Fiscal Regime Exploration
Initial Exploration Period – Up to 4 years Extension – Up to 4 years – 2 extensions- 2 each year
Production – 25 Years Extension – Up to 10 years
Royalty – Negotiable Production Sharing – Negotiable All petroleum operation costs – 100% recoverable Income tax – 30% fixed Training fund – Negotiable Community Development – Negotiable Annual land rent – Negotiable Bonus( Signature/Production) - Negotiable
Contractor’s Right Duty free import of equipment
Drilling equipment
Geophysical equipment
Duty free export of equipment
Tax exemption for expatriates
100% Petroleum operations cost recovery
Build facilities required for petroleum operations
The right to assign, transfer interests under the PPSA to any affiliate or person with knowledge of the Minister.
Contractor’s Obligations Work as per the PPSA
Acquire G and G data
Complete drilling obligations
Implement EIA and HSE requirements as per the law
Fulfill Payments on time Place parental Bank Guarantee with appropriate bank
Land Rental, Training and other fees
Bank Guarantte
Discovery and appraisal
Development and production
Regional Geology
Largely extended basins
and inter related with
many East African basins
Older and recent structures
and sediments exist through
Out Ethiopia
Modern rift system – a recent
Exploration target areas
Petroleum Potential of Ethiopia
More than 30%
sedimentary cover
Known Sedimentary basins
The Ogaden Basin
The Abay/Blue Nile
The Gambela Basin
The Mekele Basin
SER and Metema Basin
Oil seeps in different parts
Oil and gas shows in many of the exploratory wells
Recently found oil stained/impregnated reservoir rocks
The Ogaden Basin
located in the southeastern region
Occupies an area of 350,000 square kilometers.
shows deposits of 4.7 TCF of LNG and 13.6 million barrels of associated liquids.
deposits discovered in the 1970s
exploration activities carried out by a number of international companies
46 wells have been drilled with numerous hydrocarbon shows and two gas/condensate discoveries, Calub and Hilala.
Recent Success
New discovery- Increased reserve
Previous discoveries- Ogaden basin
Calub – 2.7 TCF
Hilala - 1.3 TCF
El – Kuran
Several prospects and
leads are delineated
Companies are prepared
for more drilling activities
Discoveries New discoveries
Genale area – Block 4
Stratigraphic trap
New reservoir- Gumburo Sandstone
Reservoir
- Primary – Gumburo
-Seconday- Calub
-Porosity-10-14
Estimated Reserve-766BCF
New Age-El kuran(Block 8)
The Ethiopian Gas export project
funded by Chinese firm POLY-GCL Petroleum Group Holdings Ltd,
Cost estimates - US$4 billion.
Target - global market: China, Europe
It is expected to start LNG production by late 2018 at 3 million tonnes a year at first, rising to 10 million tones
The project involves:1. Development of the Calub and Hilala fields in the Ogaden Basin
• Location - Calub - located 1200 km SE of Addis AbabaHilala - 80 km further to the east.
• Output target - initial 4 bcm/y - up to 10-12 bcm/y.
• The blocks have technically recoverable reserves of more than 100 bcm of gas or 600 million barrels of oil equivalent
• POLY- GCL signed PDA in November 2013• Two appraisal wells drilled last year yielded better-than-
expected results• test production – soon• commercial production - early 2019.
2. Building a pipeline from Ethiopia to the coast of Djibouti
700 km pipeline
Capacity - up to 12 billion m3/y
framework agreement for a cross-border pipeline signed
Joint Operating Agreement with the company
POLY-GCL signed Pipeline agreements with both countries
3. An LNG plant and export terminal at Damerjog, Djibouti.
• The liquefaction plant will have capacity to produce up to 10 million t of liquefied natural gas (LNG) per year after completion of the project.
• Export terminals having an initial receiving capacity of 3 mtpaeach, rising to 10 mtpa in the future to meet any increase in the output.
• To completed in 3 years.
POLY-GCL signed a PDA with Ethiopia's MoMP&NG in November
2013 to develop the fields
started drilling Calub11 and Hilala5 appraisal wells in October 2015
prepared a gas field development plan based on the reserve estimate
searching for oil and gas in eight exploration blocks in the Ogaden area with a total area of 117,151sq.km.
acquiring 3D and 2D seismic data from its concession / 2 development blocks and 8 exploration blocks/
using two rigs to conduct drilling appraisal and exploration wells
Calub base Camp
El-Kuran Testing
Officials visiting the site
Site visit
Currently active companiesAfrica Oil Corp.
Delonex Energy
Falcon Petroleum
GazProm Bank
New Age Ethiopia
Poly- GCL
South West Energy
Tullow
Downstream More local players are increasing
• YBP
• NOC
• TAF
• DALOL
• OLWAY
• TEBARK
• GOMEJU
• YESHI
Available Opportunities
The greater
Afar Block
The Mekelle Basin
The Segen rift basin
Abay basin
The Ogaden basin
conclusion
More mapping activities were carried out and still going on
Several prospects and leads- delineated in different block
Previous and new discoveries were made
The Gas Export project will enable Ethiopia to support socio-economic development across the region.
Two drilling rigs and five seismic crews are actively working
Opportunities for investment( exploration, production and transportation) still available
Thank you