A Canadian company, African oil, is to prospect for oil and gas resources in the Ogaden basin in the southeastern part of Ethiopia.

Based in Vancouver, the company has acquired two exploration blocks in the Ogaden basin, previously under Lundin, a Swedish oil and gas company. Lundin has conducted different geological surveys including aeromag survey in the blocks covering an area of over 25000 sq.m of land. African oil has also bought exploration blocks in Keya and Puntland. These blocks were also owned by Lundin. Last year Lundin announced that it was to farm out all its concession in East Africa, namely in Ethiopia, Kenya and Puntland.

Industry analysts believe that East Africa is the next hot zone for oil discovery. The recent discovery of oil in the Albert basin of Uganda by Tullow Oil has boosted hopes for more discoveries in the East Africa rift system.

The Ogaden basin is a vast arid land in the remote eastern part of Ethiopia. The sedimentary basin has a total area of 350,000 sq.m. As the basin has an equivalent age and similar geological formation to oil productive basins in the Middle East, it has been considered as the most promising area for oil reserve discovery.

Dozens of foreign oil companies at different times have engaged in oil exploration activities since the 1950s in the Ogaden basin, found in the Somali Regional State.

To date 47 exploration wells have been drilled at different sites by various companies in the basin. Seismic data was conducted on more than 20,000 km-long lines. Various useful geological data were collected by different companies, including the American company Tenneco and the Soviet Petroleum Exploration Expedition (SPEE).

In 1972, Tenneco discovered a natural gas reserve in Calub locality, 1,200 kms southeast of Addis Ababa. The natural gas reserve in Calub is estimated at 76 billion cu.m. Tenneco also discovered a non commercial crude oil reserve with a thickness of one meter at Hilala. The well ( Hilala 1), which is 4116 meters deep, has a production capacity of 35 barrels per day, according to studies.

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