M a r k e t N e w s

Ethiopian government to set up petroleum and mineral exploration corporation

Posted on : Tuesday, 18th October 2016

 The Ethiopian government is finalizing plans of setting up a giant corporation that will be involved in exploration, development and trading of petroleum, the exploration and development of minerals and the development of bio- fuel dubbed Ethiopian Minerals, Petroleum and Bio-Fuel Corporation with an authorized capital of $675 million. 

 
The giant corporation under formation comprises three divisions ˗Petroleum, mining and bio-fuel developments. The petroleum division will engage in the exploration, development and trade of petroleum products. The minerals vision will prospect for minerals develop and market precious metals, industrial minerals and gemstones. The corporation has taken over the Minerals Development S.C. known for the production of tantalum concentrate. The bio-fuel division will venture into the cultivation of plants and produce bio-fuel products.
 
With the view to engaging the government in the oil exploration and development business, the Council of Ministers legally established the Ethiopian Petroleum and Natural Gas Development Enterprise in June 2012. However, the enterprise was only organizing its office, recruiting staff and undertaking various studies. In December 2015, the Council of Ministers re-organized the enterprise in the form of the Ethiopian Minerals, Petroleum and Bio-Fuel Corporation by diversifying the activities and duties of the former enterprise.
 
The new corporation on Tuesday held consultative meeting with stakeholders at the Fileweha Assembly Hall. In his keynote address the CEO of the Ethiopian Minerals, Petroleum and Bio-Fuel Corporation, Mulugeta Seid  said that the corporation has been engaged with the formation of the re-organization of the corporation. “We were bringing various departments together. We were also transferring experts from various organizations,” Mulugeta said .
 
The CEO said that first-round stakeholders meeting was held and useful inputs were gathered to develop the road map of the newly-established corporation.
 
The minerals section head, Zerihun Desta (PhD), said that the minerals department was committed to produce value-added tantalum, lithium and gold minerals and supply materials to the international market. Zerihun said that the minerals wing of the corporation would pay due attention to the development of industrial minerals. According to him, the fast development of the local manufacturing sector and the construction of industrial parks have triggered the demand for industrial minerals.
 
 
The minerals wing plans to provide exploration, drilling and geological laboratory services to the private sector and generate a total annual revenue of $77 million.
 
Mulugeta on his part said that the corporation had learnt lessons from Ghana, Nigeria, Brazil, Norway and the Netherlands in drafting the business strategy of the first state oil company in Ethiopia. The CEO said that the corporation will be one of the leading enterprises in Ethiopia with an estimated revenue of $500 million and create 2000 jobs.
 
The technical adviser at the petroleum department, Abayneh Tilahun, said that the department planned to engage in the exploration, development and trading of petroleum products. Abayneh said that the corporation could undertake the work jointly with international oil companies or work by itself. The corporation might invest in oil and gas development projects, pipeline construction and refineries. Abayneh said the corporation would represent the government in oil and mining investments and administer government’s stakes in such investments.
 
The petroleum wing would collect geo-science data to companies engaged in oil and gas exploration, conduct well drilling work and geo-chemical laboratory services for international companies. “This can be done by forging partnerships with reputable foreign oil and gas firms,” Abayneh said.
 
The corporation anticipates to venture in downstream (exploration, development and production), midstream (storage and pipeline) and downstream (refinery and marketing) businesses. “This includes the manufacturing and distribution of lubricants and other petroleum products,” Abayneh said.
 
He said that lessons were drawn from giant state oil firms of Brazil (Petrobas) and Malaysia (Petronas) which are engaged in the exploration, development, production and marketing of oil products. “These companies own and administer fuel stations. And there is nothing wrong with that,” Abayneh asserts.      
 
The corporation’s biofuel wing, Nadew Tadele said that his department would focus on the production of bio-diesel. Nadew said that since fuel import is costing the country dearly the country gives due attention to the use of renewable energy sources. “As part of the country’s green economy policy, the corporation would engage in the production and marketing of bio-diesel,” Nadew said.

Source : africabusinesscommunities.com
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