(Bloomberg) -- A rebel group in eastern Ethiopia’s gas-rich Somali region began landmark peace talks with Prime Minister Abiy Ahmed’s government.

The talks may lead to a referendum on self-determination after a three-decade insurgency by the Ogaden National Liberation Front in an area where gas extraction could generate $7 billion of state revenue a year. They’re the latest step toward a political thaw in the Horn of Africa country in the wake of sweeping political reforms initiated under Abiy since he came to power in April.

Representatives of the ONLF and Somali regional state’s acting President Mustafa Omer met Ethiopian government officials in Asmara, the capital of neighboring Eritrea, ONLF Foreign Secretary Ahmed Yassin Abdi said by phone from the Kenyan capital, Nairobi. The ONLF has agreed to work with Mustafa to seek “more rights for the Somali people,” according to Ahmed.

The meeting “reached a common understanding on the issues discussed and the way forward,” he said, citing a joint statement issued Tuesday by the group and Ethiopia’s government. The parties discussed the “modalities” of future negotiations, with “substantive talks” to be finalized soon, according to the statement.

The talks came a day after the ONLF said it would demand a referendum on self-determination.

Mustafa said last week he will seek a constitutional amendment to negotiate a greater share of oil and gas revenue for the region from Ethiopia’s federal government and is establishing a commission to investigate expropriation of land from its original owners, moves that may aggravate a scramble for the region’s energy resources.

To contact the reporter on this story: Nizar Manek in Addis Ababa at nmanek2@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Paul Richardson, Pauline Bax

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