20091211

JIJIGA, Ethiopia (Reuters) - A rebel group's claims to have captured seven towns and killed 1,000 soldiers in fierce fighting in Ethiopia's oil-producing Ogaden region are almost certainly exaggerated, foreign aid workers in the region say.

Ethiopia's Ogaden National Liberation Front (ONLF) staged bold raids on government positions last month and aid workers say several hundred people were probably killed on both sides.

But while the guerrillas are capable of causing instability in the vast Somali region, which includes the Ogaden and accounts for one-fifth of the country's landmass, experts say they cannot hold territory.

"They attacked more than twenty places," one aid worker, who asked not to be identified, told Reuters in Jijiga, the regional capital. "But they only managed to take one town, not seven."

A culture of secrecy and suspicion has surrounded the volatile Ogaden region ever since the ONLF overran a Chinese oilfield in 2007 and killed 74 people.

Now that foreign firms including Malaysia's Petronas

and Vancouver-based Africa Oil Corporation are back at work in the region, some are wondering whether the investment will be worth the risk.

Ethiopia is offering up to 14 more exploration permits over the next three years, and the government is keen to make sure the guerrillas do not attack again.