5.000
%
Neutral
112
mm boe
0
%
Ethiopia's macroeconomic reforms under its IMF programme have improved the outlook, but conflict in Amhara and tensions with Eritrea are serious risks ahead of the 2026 election. The Ogaden gas project remains stalled. Outlook maintained because reform progress is offset by conflict risk. Outlook: Neutral. Risk premia raised from 2.5% to 5%.
October 8, 2026
Africa - East
mm bbl
bcf
Eastern Africa, landlocked, west of Somalia, between Sudan, Kenya and Eritrea.
PSC/PSA
Production sharing regime. Upstream rights are granted under the Petroleum Operations Proclamation (No. 295/1986) and its income tax proclamation, with the Ministry of Mines awarding petroleum production sharing agreements that set royalty, cost recovery, profit split and income tax terms block by block, and the state company Ethiopian Minerals, Petroleum and Biofuel Corporation holding the government's interest. The main project is the Calub and Hilala gas fields in the Ogaden (Somali region), awarded to China's Poly-GCL under 2013 PSAs that gave the State a 15% share and the company 85%. The licence was terminated in 2022 for lack of progress but later restored to GCL, which is now commissioning a gas processing plant to supply domestic demand, including a 25-year supply deal with the Dangote Group. Security in the Ogaden and a history of slow progress and licence disputes weigh on the regime.
Prime Minister Abiy Ahmed's government faces the Fano insurgency in Amhara, a fragile peace in Tigray and tensions with Eritrea over his push for Red Sea access. National elections are due in 2026. Under the 2024 IMF programme, the birr has been floated and sectors such as banking and retail are opening to foreign investors, although the Eurobond default restructuring continues. The FCDO advises against travel to several regions. The GERD dam was inaugurated in 2025, but Chinese-led development of the Ogaden gas fields (Calub and Hilala) has stalled.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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