The Ethiopian Ministry of Mines and Minerals has terminated the contract granted to the Chinese POLY-GCL company, which obtained a license to export natural gas discovered in the Somali region as well as further petroleum (petroleum oil) exploration and development in the same area.
The Minister of Mines Takele Uma (Engineer) announced that, although the government has made efforts to make the company work using its existing capabilities, the company has not been able to achieve the expected development, financial and technological capabilities. As such, the contract has been terminated today, September 21, 2022.
The minister, as per Ethiopian Reporter Newspaper, added that if the company is once again able to meet the conditions that the government has set, there is a possibility that it will be re-hosted.
According to Addis Standard, POLY-GCL has been exploring petroleum & natural gas in the Ogaden basin since 2013. On June 28, 2018, it officially began crude oil production tests in the Hilala oil fields, marking an important milestone in Ethiopia’s oil and gas development history.
However, four years later, in June of last year, the Ministry issued a warning letter to the company citing its failures to meet the government’s plans that ultimately led to the official cancellation of the contract.