By Barry Malone

ADDIS ABABA (Reuters) - Malaysian state oil company Petronas has asked Ethiopia to approve an agreed deal to sell all its oil and gas concessions in the country to a locally owned firm, a senior government official said on Monday.

SouthWest Energy (H.K.) Ltd, an Ethiopian-owned company registered in Hong Kong, said in a statement it had agreed to buy all of Petronas's interests in the Horn of Africa nation, where rebels threaten the exploration activities of foreign firms.

"Petronas wants to transfer its assets to SouthWest Energy," Ketsela Tadesse, head of licensing at the Ministry of Mines, told Reuters.

"When we receive all necessary documents, we will analyse the request and decide whether the transfer is feasible before making a final decision."

Officials at Petronas could not immediately be reached for comment.

The Ogaden National Liberation Front (ONLF) is fighting for independence for the mainly ethnic Somali Ogaden region and regularly warns foreign oil and gas companies to stop exploring there or face attacks.

Twelve foreign firms are exploring Ethiopia for oil and gas deposits, though significant amounts have yet to be discovered.

The ONLF says SouthWest Energy is owned by a member of Ethiopia's ruling party, which the company denies.

PEACE DEAL

The confirmation comes after local reports that Petronas had pulled out of Ethiopia after the May killing of a British geologist subcontracted to the firm by IMC Geophysics International. Nobody claimed responsibility.

Government spokespeople have this year admitted to skirmishes with the ONLF, but Prime Minister Meles Zenawi has since said the rebels had been crushed.

The government says it will on Tuesday sign a peace deal in the capital Addis Ababa with a faction of the ONLF that represents 80 percent of its fighters.

Spokespeople for another faction that has claimed responsibility for all attacks over the past three years, however, have denied that it is involved.

Ethiopian forces launched an assault against the ONLF, which has been fighting for more than 20 years, after a 2007 attack on an oil exploration field owned by a subsidiary of China's Sinopec Corp.

Analysts say the rebels are incapable of ousting the government but can hamper development and weaken security forces in the Ogaden with hit-and-run attacks.

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