Petrotrans, the Honk Kong based petroleum company is seeking arbitration for the termination of its gas fields development project by the Ethiopian Ministry of Mines according to sources.
The company is in the process of preparing for a legal suit at the International Arbitration Court in Geneva said the sources.
It is to be remembered that the Ministry of Mines revoked the development agreement signed with the agreement last July claiming that it had failed to execute the project according to the agreed upon schedule.
The company had been unable to initiate actual exploratory activities thus breaching its agreement with the Ethiopian government according to the termination notice sent by Sinkenesh Ejigu, Minister of Mines.
Petrotrans denied the merits of the claim and countered that it had been in the process of analyzing and interpreting geological data that had been collected by Petronas while it had been operation the concessions.Gas development is a complex process that requires significant infrastructure to extract and transport the gas including a Liquid Natural Gas Treatment plant and gas pipelines all requiring large amounts of investment according to a senior Petrotrans executive. The company had consequently taken time to confirm the presence of reserves as preliminary to launching actual field work he noted.
The Ministry of Mines has not replied to the company’s request for consultation and consequently the next step is presenting the case to the International Arbitration Court in Geneva although the company considers this a last resort and would much prefer to hold discussions with the MoM and other relevant government bodies said the executive.
The MoM is justified in revoking the agreement with Petrotrans and is ready for a hearing before the arbitration court said Sinkenesh.
Source: The Reporter
