AGTA9 Dec 2010 18:39
Africa Oil signs new study agreement with Ethiopian government
EBR Staff Writer
Published 09 December 2010
Canadian oil and gas firm Africa Oil has signed a definitive agreement with the Government of Ethiopia to jointly study the Rift Valley Block.
The block is located north of the company's South Omo Block and encompasses the remainder of the Tertiary age East Africa Rift Trend in Ethiopia.
The company has committed to carry out an airborne geophysical survey over the block, which spans 42,519sq km.
Africa Oil will also work closely with seconded members of the Ethiopian ministry of mines to support local capacity building.
The joint study agreement has an 18 month term, following which Africa Oil will have the exclusive right to enter into negotiations for a production sharing agreement for all or part of the Rift Valley Block.
The company plans to carry out the airborne geophysical survey, together with reconnaissance field geology, in 2011.
The company has also closed the Ethiopian portion of the five block farmout transaction with Tullow Oil.
As a result of the completion of the South Omo Block portion of the transaction, Tullow now has a 50% operated position in the block, with Africa Oil holding a 30% interest and Agriterra Limited holding the remaining 20%.
Tullow has paid $1.3m to Africa Oil, in consideration of back costs, and is obligated to fund the next $23.75m of Africa Oil's future costs in the blocks.
The closing of the Tullow transactions on the additional four blocks, being Blocks 10A, 10BB, 12A and 13T, all located in Kenya, remains subject to the conclusion of the Interstate Petroleum court proceedings.
http://explorationanddevelopment.energy-business-review.com/news/africa-oil-signs-new-study-agreement-with-ethiopian-government-091210
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