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Ethiopia denies rebels chased oil, gas firms away

* Petronas has not pulled out of Ethiopia, minister says

* Govt negotiating deals with three more oil and gas firms

By Barry Malone

ADDIS ABABA, Sept 2 (Reuters) - Rebel claims that Malaysia's Petronas has stopped oil and gas exploration in Ethiopia are lies and three more firms are in negotiations to start exploration in the country, its mines minister said on Thursday.

Ogaden National Liberation Front (ONLF) separatists and local media said state-owned Petronas had pulled out of the Horn of Africa nation after a gas field it was exploring was overrun by the militants in May.

"The rebels took no gas field," Mines and Energy Minister, Alemayehu Tegenu, told Reuters in an interview. "That didn't happen. Petronas have not ceased operations. They have just suspended work to evaluate their portfolio."

Petronas have yet to comment on the reports.

The ONLF is fighting for independence for the mainly ethnic-Somali Ogaden and has warned international oil and gas companies to stay away or face attack.

Firms including Petronas and the Vancouver-based Africa Oil Corporation are exploring the Ogaden for potential oil and gas reserves. Twelve foreign mineral firms are exploring Ethiopia for deposits.

Apart from a small discovery of natural gas, which Petronas has signed a $1.9 million deal to extract, Ethiopia has not uncovered significant oil or gas deposits.

The government says the Ogaden basin may contain gas reserves of 4 trillion cubic feet and points to oil-producing neighbours such as Sudan and Yemen as evidence there could be major oil deposits under Ethiopia's vast deserts.

Alemayehu said Ethiopia was secure and the government was negotiating new exploration licenses with three foreign firms. He did not name them.

'OUR MILITARY IS IN CONTROL'

"We have no complaints from companies exploring here about our security," the minister said. "We have secured them. Our military is in control."

Alemayehu also said peace negotiations with one faction of the ONLF were at an advanced stage. ONLF spokesmen have denied a deal is imminent.

The Ethiopian government has reported some skirmishes with the rebels in the past six months, but regular accusations from both sides are hard to verify. Journalists and aid groups cannot move in the area without government escorts.

Ethiopian forces launched an assault against the ONLF -- who have been fighting for more than 20 years -- after a 2007 attack on an oil exploration field owned by a subsidiary of China's Sinopec Corp, Asia's biggest refiner.

"Since that attack, we have secured the area," Alemayehu said.

A British geologist was shot dead in the Ogaden last July while working for IMC Geophysics International, subcontracted to Petronas. The ONLF denied involvement and the government said 'bandits' were responsible.

Analysts say the rebels are incapable of ousting the government but can hamper development and weaken security forces in the Ogaden with hit-and-run attacks. (Editing by George Obulutsa and James Jukwey)

Ethiopian Runner Berhanu Took his own life

By David Monti

letsrun.com

September 1, 2010

Ethiopian distance runner Dejene Berhanu, who was reported dead at the age of 29 last Sunday by his management firm, took his own life. Two independent sources contacted by Race Results Weekly who had knowledge of the situation, one in the United States and one in Ethiopia, confirmed the news. Neither source wished to be identified given the sensitivity of the situation.

"It is true that Dejene Berhanu died on Sunday from suicide and was buried on Monday," said the Ethiopian source. "The cause of death is suicide. These are the facts I know at the moment."

Berhanu first became known in 2000 when he took the silver medal at 10,000m at the African Championships in Algiers. He would eventually improve to make the 2004 Ethiopian Olympic team and finish fifth at the 5000m. He also won the Great North Run Half-Marathon later that year. He had lifetime bests of 12:54.15 for 5000m, 27:12.22 for 10,000m, 59:37 for the half-marathon and 2:08:46 for the marathon.

A versatile athlete, Berhanu also ran on the U.S. road circuit, competing in the TD Bank Beach to Beacon 10-K in Cape Elizabeth, Me., three times, including a 14th place finish at this year's race on August 7. According to a report in the Portland Press Herald, it was in Cape Elizabeth where Berhanu met an ophthalmologist, Dr. Jeff Berman. Berman diagnosed Berhanu with a droopy eyelid, and arranged for doctors in Maine to correct it through surgery after the 2009 edition of the Beach to Beacon.

"We're crushed," Dr. Berman told the Press Herald earlier this week after hearing the news. "It's like a member of our family died. What a tragedy."

Berhanu left behind a wife and a three year-old daughter.

Ethiopia rejects dam criticism, targets 10,000 MW

By Barry Malone

ADDIS ABABA (Reuters) - Ethiopia on Thursday rejected criticism of its massive hydropower dam projects and vowed to push ahead with plans to boost its power generating ability from 2,000 MW to 10,000 MW within five years.

The Horn of Africa nation's ambitious dam building programme has drawn fire from human rights groups as well as from Egypt and other Nile River countries.

"We have a plan to reach 10,000 MW within the coming five years," mines and energy minister, Alemayehu Tegenu, told Reuters in an interview.

"Most of the energy we plan to generate will come from hydropower."

Ethiopia is overwhelmingly reliant on dams for its energy needs and has opened three over the last year, bringing the total number in the country to seven.

Another two are being built, including the huge Gibe III -- a project that foreign charities say could leave more than 200,000 people reliant on food aid.

Rights groups, spearheaded by Survival International, have started an online campaign against the dam, which would generate 2,000 MW, and are lobbying international lenders not to contribute to its 1.4 billion euro cost.

"These organisations do not want Ethiopia to develop," Alemayehu said.

"Criticising countries like Ethiopia is their source of income. They have no reason to attack our dams. We have environmental and social plans in place."

The European Investment Bank (EIB) said last month that it had decided not to help fund the project but did not say why it had made that decision.

Alemayehu said it was possible the EIB had been pressured by rights groups.

"But I don't know their reason," he said. "It's not a big problem for us. We have other options. And the funding at the moment is coming from our government."

"NO NILE WAR"

Ethiopia's hydropower plans are also closely watched by Egypt and Sudan who fear more dams on Ethiopia's stretch of the Nile could leave them thirsty.

After more than a decade of talks driven by anger over the perceived injustice of a previous Nile water treaty signed in 1929, Ethiopia, Uganda, Tanzania, Rwanda and Kenya signed a new deal in May without their northern neighbours.

The five signatories have given the other Nile Basin countries -- Egypt, Sudan, Burundi and Democratic Republic of the Congo -- one year to join the pact but the countries have been split by behind-the-scenes rows since the signing.

Under the 1929 deal, Egypt, which faces water shortages by 2017, is entitled to 55.5 billion cubic metres a year, the lion's share of the Nile's flow of 84 billion cubic metres. Some 85 percent of the Nile's waters originate in Ethiopia.

The nine countries are due to meet again in the Kenyan capital Nairobi in November.

"What we will construct on the river will never cause any problems for the Egyptians," Alemayehu said. "But the Egyptians always stand against Ethiopian development. They need to understand better what we are planning."

Alemayehu, however, ruled out the possibility that war could erupt over the Nile.

"That will never happen," he said. "Never."

Ethiopia plans to export power to neighbouring Sudan, Djibouti and Kenya as soon as it meets its own growing energy needs, Alemayehu said.

Ethiopia rationed power for five months this year with outages every second day, which closed factories, hampered exports and fuelled a currency shortage.

"We should have no need to ration power in 2011 with our new dams," Alemayehu said. "We are now building interconnectivity infrastructure with Sudan and Djibouti and that should be finished within six months."

Power demand in Africa will rise by 150,000 MW between 2007 and 2030, according to the International Energy Agency.

Australia to open embassy in Ethiopia

Source: The Age

AUSTRALIA will soon open an embassy in Ethiopia in what is widely seen as an attempt to bolster the campaign to win a prized seat on the United Nations Security Council.

Senior foreign affairs officer Lisa Filipetto is expected to take on the job as ambassador to Ethiopia in the coming months.

The new diplomatic post will be located in the capital, Addis Ababa, and is a crucial location to lobby countries from across Africa.

Addis Ababa is also the headquarters for the African Union, the 53-nation organisation that represents the continent.

Winning support from this African bloc is critical to Australia's hopes of winning a Security Council seat in a 2012 vote at the UN and Ms Filipetto will also be designated ambassador to the African Union.

But opening a new embassy poses an awkward challenge for the government amid criticism that the campaign is too costly.

It also follows a series of cuts to the Foreign Affairs Department - including Labor's pledge this election to scrap 20 diplomat positions overseas.

The Coalition has promised to abandon the Security Council bid should it take office, after complaining Australia has been forced to sacrifice policy positions and buy votes with extra foreign aid.

In 2008, Foreign Minister Stephen Smith said ''when it comes to costs, for example, we're not going to be opening a post here or there just to buy a vote''. He continues to reject the accusations.

But close observers say having a presence in Addis Ababa is essential to winning the backing of African nations.

La Trobe University foreign affairs specialist Nick Bisley said yesterday there was no other reason for Australia to open an embassy so far from its region while at the same time cutting back the foreign service.

But he doubted Australia would ultimately succeed in its Security Council bid.

Australia did briefly open an embassy in Addis Ababa in 1984 - around the time of its last successful tilt for a Security Council seat - but closed the post again in 1987.

Ethiopia does not have an embassy in Australia and is represented by its ambassador to Beijing.

Mr Smith flagged the plan to open an embassy in Ethiopia in May, saying it ''will be a potent symbol of Australia's renewed commitment to Africa''.

He also said Australia would base a new defence attache at the new Addis Ababa embassy to build security and defence co-operation with the African Union and African countries.

Rejecting the commitment to Africa was short term, Mr Smith said more than 150 Australian companies had projects spread across 40 African countries.

Labor has opened two other embassies since 2007, at the Vatican and in Peru.

Australia must secure the backing of 128 countries to beat either Luxembourg or Finland for one of two temporary seats on the council.

An international survey by The Age last year showed Australia had so far won support for its bid from a number of countries including the Netherlands, Israel and Saudi Arabia.

A spokeswoman for Mr Smith last night said any announcement on the new ambassador was a matter for the incoming government.

Ms Filipetto was high commissioner to Kenya until this year. She also was ambassador in Cambodia and speaks Italian, Indonesian and French.

Ethiopian birr devalued, IMF welcomes move

By Barry Malone

ADDIS ABABA (Reuters) - The Ethiopian birr was devalued by 16.7 percent on Wednesday, according to exchange rates published on the central bank's website, a move welcomed by the International Monetary Fund (IMF).

The birr was quoted by the National Bank of Ethiopia at a weighted average of 16.3514 against the dollar compared with 13.6284 on Tuesday. A central bank official confirmed the new rate but was not authorised to make further comment.

"The IMF welcomes this move given it will help bolster Ethiopia's competitiveness," IMF representative in Ethiopia, Sukhwinder Singh, told Reuters. "It will need to be supported by appropriate monetary policy."

Last month, the government unveiled an ambitious five-year economic plan which targets average annual economic growth of 14.9 percent over the period and aims to end the Horn of Africa nation's dependence on food aid.

Ethiopia is Africa's biggest coffee exporter and the world's fourth largest exporter of sesame. It is also one of Africa's biggest potential markets -- with a population of 80 million -- and most of its people have no telephones or bank accounts.

The devaluation is the Horn of Africa nation's fourth since January 2009. Devaluations can spur economic growth and reduce current account deficits to the extent they boost exports and discourage imports, although they carry the risk of importing inflation.

'DEPRECIATION LIKELY TO CONTINUE'

"I think it's related to the new five-year plan and a strategy of export promotion and import substitution," Tewodros Mekonnen, an economist with local think tank, the Ethiopian Economic Association, told Reuters.

"Obviously there's a risk it could cause inflation. It will probably also boost foreign direct investment and remittances."

Inflation in Ethiopia hit a high of 64.2 percent in July 2008.

After that peak, the government halted state borrowing and increased bank reserves to drive down the rate.

The country's central bank also instructed private banks to restrict borrowing.

The inflation rate slowed to 5.7 percent in July.

"Years of high inflation have eroded the country's export competitiveness, and the government has continually favoured sharp currency depreciations to counteract this," Joseph Lake, an analyst at the Economist Intelligence Unit, told Reuters.

"Though inflation has eased in recent months, this pattern of currency depreciation is likely to continue. Low levels of foreign exchange reserves, and twin fiscal and current-account deficits will continue to put pressure on the currency," Lake said.

The country -- one of the world's biggest recipients of foreign aid -- is keen to attract foreign investment in agriculture and mineral exploration.

Ethiopia has operated a managed floating exchange rate regime since 1992.