Ethiopia cancels gas, oil exploration contract with Chinese firm

By Seleshi Tessema

ADDIS ABABA, Ethiopia (AA) – Ethiopia has canceled its contract with a Chinese company exploring for oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.