Page 18 - DMEA Week 01 2021

DMEA REFINING DMEA

Ethiopia preparing to scrap GTL

contract following probe

ETHIOPIA ETHIOPIA’S Ministry of Mines and Petroleum money ahead of starting work on the GTL pro-
has announced plans to exit the contract it signed ject. “First, the company wanted the Ethiopian
According to Quartz with US-based GreenComm Technologies last government to put forward a $100mn standby
Africa, the US-based April for the construction of a new gas-to-liquids letter of credit [l/c], which we learned was
company is headed by (GTL) plant in the Somali region. because they sought to get billions from lenders,”
Nebiyu Getachew, an Koang Tutlam, State Minister for Petroleum he explained. “But we refused to give in, despite
Ethiopian-American and Natural Gas, revealed earlier this week that immense pressure from some heavy quarters.”
and a former employee the deal, which is worth an estimated $3.6bn, The minister of state further noted that
of an automobile was being scrapped. “We are in the process of GreenComm had not upheld its contractual
dealership who has no cancelling our agreement with the company,” he obligation to deposit $5mn worth of insurance
experience in the oil said in a statement sent to Quartz Africa. (The in the form of a performance bond. “We are
and gas industry. news portal has been investigating the project cancelling the agreement, but we are also taking
and describes it as an oil refinery construction legal measures against the company for its failure
deal, but previous reports indicate that it involves to release the performance bond,” he said. “Rest
the building of a gas-to-liquids, or GTL, plant.) assured, Ethiopia has not lost a penny and wasn’t
Koang, who reports to Minister of Mines and about to lose anything.”
Petroleum Takele Uma, also confirmed that the Koang was a member of a team of ministry
contract was being rescinded because Green- officials that reviewed the offer that Green-
Comm had grossly misrepresented its technical Comm submitted jointly with Innovative Clear
and financial capabilities. According to Quartz Choice Technologies (ICCT), a Texas-based
Africa, the US-based company is headed by company, in 2018, Quartz Africa noted. ICCT,
Nebiyu Getachew, an Ethiopian-American and which was just as lacking in credentials as its
a former employee of an automobile dealership partner, was disbanded in February 2020, but its
who has no experience in the oil and gas indus- disappearance did not serve as a barrier to the
try. It has no visible assets, and its listed address signing of the GTL contract. (Nor did it clear up
is not currently occupied. confusion over the question of whether Green-
Getachew reportedly founded GreenComm Comm had agreed to study the project or build
and registered it in the state of Virginia in 2011. the GTL plant itself; the company’s public state-
However, the company had already been delisted ments on the matter have been contradictory
from Virginia’s corporate database by the time it and confusing.)
finalised its agreement with the Ethiopian gov-
ernment last year, Quartz Africa noted. Five new blocks
Koang indicated that a number of officials Reports of the contract’s cancellation emerged
in the Ministry of Mines and Petroleum had shortly after Ethiopia’s Ministry of Mines and
expressed opposition to the GTL deal, which had Petroleum revealed that it had included five
been under negotiation since 2015. “Although potentially oil- and gas-bearing blocks in a
the so-called GreenComm Technologies project new batch of subsurface licence areas offered to
preceded most of us at the ministry, some of us investors.
were sceptical about their genuineness from the As of press time, the ministry had not
beginning,” he said in the statement. “As such, revealed the names of these exploration blocks.
some of us worked hard to prevent the [govern- Officials in Addis Ababa have said, though, that
ment] entering into a commitment that would the sites are located in Gambella, Ogaden, Rift
cost the country.” Valley and South Omo.
He also informed the news portal that the As of press time, no information was avail-
company had tried to secure a large sum of able. ™

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