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Marathon Oil Corporation has announced its intention to enter the Ethiopia market after acquiring Agriterra Limiteds 20 per cent working interest in the South Omo concession

The two companies agreed a sale and purchase agreement that will see Marathon subsidiary Marathon Ethiopia Limited BV join forces with Tullow Oil, who operates the South Omo concession with a 50 per cent working interest, and Africa Oil Corp. who holds the remaining 30 per cent working interest. 

Marathon Oil vice president for global exploration, Annell Bay, remarked, "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.

"We are excited to build on our partnership with Tullow and Africa Oil," Bay added.

According to a statement from Marathon, the company expects to close its transaction with Agriterra and win approval from the Ethiopian government for the deal before the end of 2012. Marathon will pay Agriterra an initial US$40mn and will be expected to make an additional payment of US$10mn if a commercial discovery is made on South Omo.

The South Omo concession covers an area measuring 29,465 sq km and an exploration well has been anticipated to spud on the concession in Q4 2012.

African Review