Addis Ababa announced yesterday it has ended the prospecting contract of the Chinese oil company, Poly-GCL, after it failed to meet the financial obligations and technical conditions of the deal.
Partly-owned by the Chinese government, the company has been exploring for oil and gas in the Ogaden Basin in eastern Ethiopia. Poly-GCL has been exploring petroleum and natural gas in the Ogaden basin since 2013.
However, on June 28, 2018 it officially started crude oil production tests in the Hilala oil fields in the presence of then regional officials and representatives of the federal government.
It was hailed as important milestone in the history of the oil and gas development in Ethiopia with Prime Minister Abiy saying that 450 barrels would be produced on a trial basis.
Residents in the area have alleged its water has been contaminated through the improper disposal of dangerous waste products. The company is yet to react to the claims.