Hong Kong-based SouthWest Energy has agreed to purchase all of the oil and gas interests of exploration and production company Petronas Carigali in Ethiopia.

The transaction is expected to be completed during the first quarter of 2011 following the fulfilment of certain conditions precedent, including regulatory approval.

Petronas Carigali is a party to five petroleum production sharing agreements (PSAs) for oil and gas exploration and production in Ethiopia, and its interests in each of those PSAs will be acquired by SouthWest Energy.

The blocks and contract areas covered by the PSAs are 3&4, 11&15, 12&16, 17&20 and the Calub & Hilala.

All of the blocks and contract areas are located southeast of Addis Ababa in the Ogaden Basin, which covers 350,000sq km and is said to be the largest proven hydrocarbon bearing sedimentary basin in Ethiopia with proven gas reserves of 2-4tcf.

SouthWest Energy chairman and CEO Tewodros Ashenafi said that the company intends to develop these new blocks together with its existing blocks as quickly as possible and to work on developing transport solutions for hydrocarbons in the Ogaden Basin.