Ethiopia registered more than USD 825 million in investment capital related to the granting of a concession for investors in an unnamed natural gas venture last fiscal year, according to a Ministry of Mines report obtained by The Reporter.
“During the year, one petroleum development license and one petroleum exploration license were granted. The investment registered from these licenses is 825.5 million dollars,” states the report.
The development leaves the value of new investments registered by the Ministry last year at close to five billion birr, much higher than the 800 million birr its officials had planned, according to the report.
However, the performance in registering new investment licenses was less impressive. The Ministry was looking to approve a total of 50 licenses for domestic investors last year in exploration, mining production, and processing, but managed only 13. It granted a total of 13 licenses to foreign investors, half of its target.
The report reveals that a study is underway to determine the feasibility of setting up a fertilizer production plant using natural gas. It indicates Ethiopia has registered a huge amount of capital in natural gas investments, on par with what Safaricom paid for its telecom operator’s license a few years ago.
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However, questions surrounding regulatory licensing standards related to a natural gas venture remain as the Ministry is yet to introduce a natural gas development policy and the related proclamation and regulations. It had planned to introduce the legislation last year, but this has not yet materialized.
Sources say the Ministry is working on the legal framework and on establishing a department to oversee natural gas resources.
The recently published report also fails to mention the name of the natural gas investor or the exact location of the investment.
A previous Ministry report mentioned that officials had decided to award a natural gas concession to Poly CGL, a firm that had been conducting exploration works in the Somali region before its license was stripped in 2022.
Poly CGL is a joint venture between the Chinese Poly Group Corporation and Hong Kong’s Golden Concord Group that was first granted a concession to explore and produce natural gas in the Somali region in 2013. Despite conducting exploration works and pilot production trials in the Calub and Hilala drill areas, the company failed to begin natural gas production before 2017 as was stipulated in the initial agreement with the federal government.
The report indicates the Ministry has undertaken rigorous due diligence on the firm and opted to re-award the natural gas license to Poly CGL. However, the federal government has not officially disclosed the awarding of the license or any progress regarding natural gas extraction endeavors in the country.
Sources told The Reporter the Ministry’s reports are being manipulated intentionally.
“Such a major mega-project would not proceed without an official announcement and a groundbreaking ceremony by senior officials. There is a reason why the Ministry is sneaking the data into its reports,” said an insider familiar with the issue.
Officials at the Ministry of Mines did not reply to The Reporter’s requests for comment.
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