Marathon moves into Ethiopia

Marathon Oil Corp. said today it is expanding its footprint in Africa in a deal with Agriterra Limited to acquire the company’s 20 percent working interest in the South Omo concession in Ethiopia.

The deal is subject to Ethiopian government approval, but Marathon said it expects it to close by the end of the year.

Tullow Oil, a London-based independent exploration and production company, is the operator of the 7.2 million acre South Omo concession, with a 50 percent working interest. Africa Oil holds the remaining 30 percent working interest.

Marathon said an exploratory well is expected to begin drilling in the fourth quarter.

It will pay Agriterra $40 million before closing adjustments, and an additional $10 million upon Marathon’s participation in a declaration of a commercial discovery on the site, the company said.

The deal marks Houston-based Marathon’s entry into Ethiopia, but it already has operations in three African countries, including Angola, Equatorial Guinea and Libya.

“This acquisition is a strong addition to Marathon Oil’s position in the Tertiary rift trend onshore East Africa and is on trend with the recent Ngamia-1 discovery in Kenya,” Annell Bay, Marathon’s vice president for global exploration said in a statement issued by the company.