Eoin O'Cinneide

03 October 2012 07:35 GMT

Marathon Oil is making a splash in East Africa’s nascent market by taking a chunk of a Tullow Oil-operated block in Ethiopia.

The US independent giant is spending up to $50 million to get its hands on a 20% slice of the South Omo Block as agricultural player Agriterra sells out.

Marathon is paying $40 million up front to Mozambique and Sierra Leone-focused Agriterra and will stump up an additional $10 million should a commercial discovery be made.

In August 2010 Canada’s Africa Oil took an 80% stake in the block off Agriterra before swiftly selling on a 50% operating slice to Tullow that same year.

Both Tullow and Africa Oil have already waived their pre-emptive rights over the Marathon buy-in, Agriterra said on Wednesday.

The presence of such a large player as Marathon in the block will give a boost to Ethiopia’s oil plays which are at a very early stage.

Tullow has said its presence in the South Omo Block complements its 50% operated interest in six adjacent Kenyan licences.

The combined acreage covers the Turkana Rift Basin which is similar in character to the Lake Albert Rift Basin and also a south-east extension of the geologically older Sudan rift basins trend, Tullow has said.

‘’’’’’’’’’’’’’’’’’’’’,,,,,,,,,,,,,,’’’’’’’’’’’’’’’’’’’’’’’’’’’’,,,,,,,,,,,,,,,

Energy and Capital … AOI

Africa's Latest Gusher

You Heard It Here First

By Nick Hodge

Wednesday, October 3rd, 2012

For the better part of the second half of last year, we spent a lot of time telling you about a unique oil situation.

As is normally the case with our insights, the events we foretold are currently unfolding...

When Kenya's energy minister took to the podium at a recent conference, one simple sentence confirmed what we told you would be true: “We are becoming the New Middle East.”

It's not hard to see why. The same ancient formations that gave Saudi Arabia its large oil deposits also extend downward into Africa.

This is the fact we spent so much time trying to tell you about.

Everyone knows the Saudis are the Kings of Oil. The legendary Marib-Shabwa and Sayun-Masila Basins — which include the biggest oil field of them all, the massive Ghawar — has allowed their wealth to climb to the trillions... and has allowed the Middle East to dictate politics for decades.

Those same formations gave Kuwait, Iraq, and Iran their great oil fields as well.

Common thought was that oil wealth was monopolized by the Arabian Peninsula — which is why we knew billions would be made when the world started learning the great oil fields of the Middle East also extend down into Africa.

We released a full report about how Africa had “stolen” almost $300 billion worth of King Saud's oil and about the company you could invest in to capitalize.

That was June last year. The company was Africa Oil (TSX-V: AOI).

What's Happened Since?

Africa Oil — which was trading for below $1.50 when we urged you to buy — is up near $10.00, having touched $11.35 at its peak.

Being among the first to know the companies taking advantage of large East African oil deposits would have netted you 683%.

Here we are, some 15 months later, and a “breaking” news story from Reuters this week tells us:

British explorer Tullow Oil and its Canadian partner Africa Oil Corp started drilling a third well in Kenya, extending a campaign to discover more reserves after finding oil in the east African country earlier this year.

East Africa has become a hotbed of exploration after several petroleum discoveries in the area pushed the region into the international limelight.

Notice the multiple “afters” in those two sentences.

We told you before Africa Oil drilled its first well — not after its third. (This one could yield 120 million barrels.)

We told you before East Africa became the world's newest oil hot spot.

If you missed the opportunity to bank the near-700% gains that resulted, make sure you read this.

It's our newest report about oil and gas: where it's coming from, where it's going, and how to profit from it.

But like the Africa Oil report from last year, you need to act now... or you'll read about it somewhere else later.

Call it like you see it,

Nick Hodge