Tullow Moves Out Staff, Machinery

by Zelalem

The British oil company which is prospecting for oil in the South Omo basin of Ethiopia, Tullow Oil, is moving its staff and machineries out of Ethiopia.

At a consultative meeting on the Ethiopian mining sector jointly organized by the World Bank and the Ethiopian Ministry of Mines on October 7 and 8 at the Addis Ababa Hilton, Nick Woodal-Mason, country manager, Tullow Oil, said that his company is taking its staff and mining equipment out of Ethiopia. “After drilling four wild cat wells in the South Omo basin we found nothing. We found only clay. Geologically, the results are a nightmare,” Nick told the participants. The company has already released the well drilling rig.

Tullow Oil began prospecting for oil in the South Omo basin in 2011 after it bought a 50 percent stake from Africa Oil, a Canadian oil company. Africa Oil and Marathon Oil own 30 and 20 percent working interest in the South Omo basin respectively. Tullow drilled four exploration wells; Sabisa-1, Tultule-1, Shimela-1 and Gardim-1 but it did not find any oil and gas reserve.

Nick explained how Tullow decided to come to Ethiopia. “We came here after we discovered oil reserves in Uganda and Kenya. We got positive results in the Great East Africa Rift Valley. The rift system extends to Ethiopia. Our blocks are found in South Omo near the Kenyan border where we found hundreds of millions of barrels of oil. The decision to come to Ethiopia was good but it did not work out.”

According to Nick, 35 expatriates from Tullow’s Ethiopian office have already left and there are about only five expatriates who are still here dealing with logistics and customs issues. “By December we are all leaving Ethiopia and we will keep only a skeleton office for the coming two years,” Nick said.

Nick explained the complexity of the oil exploration project in South Omo. “The concession is found in one of the remotest places not only in Ethiopia but in Africa. It is located 1600km south-west of the port of Djibouti. It takes ten days for a truck to reach the concession from Galafi, the Ethio-Djibouti border, to our camp. It costs us 10,000 USD per truck for a one-way trip. This makes our exploration work very expensive,” Nick said.

He noted that the drilling work was the most challenging one due to well instability and the hot temperature, as hot as 200 degree centigrade underground.

Nick said Tullow Oil will provide all the petroleum data it collected from South Omo and Chew Bahir to the Ethiopian Ministry of Mines Petroleum Licensing and Administration Directorate. “We have done by far more than our commitments. So we are not going to do extra work in the coming two years until the exploration agreement expires.”

Experts of Tullow Oil are now recalibrating the basin based on the data collected from the wells. “There is evidence of source rocks in the wells. That is not to mean that they do not exist in the kitchen,” Nick said. “We could not find the source rock.” However, he said, the subsurface data required from wells was obtained. According to him, the worldwide statistics of success rate ratio in drilling wild cat exploration wells is one out of 11. “Unfortunately, our wells were some of the ten failures.”

Nick said the company is leaving behind the infrastructure it built in South Omo. “We are leaving behind the roads and bridges we built and the local persons we trained.”

Tullow oil spent 250 million dollars on the South Omo oil exploration project.

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