Licensing Update: Somalia

1st Round in 2017
This article appeared in Vol. 13, No. 6 - 2017


Somalia location map, showing Spectrum seismic lines [Blue - 2014, Red - 2015/6]. (Sources: Map from Spectrum and Globe from TUBS) In recent years, Somalia has made great strides on the road to effectively exploiting its natural resources. The Somalian Ministry of Petroleum and Mineral Resources is now operating from a new building, complete with a dedicated data room, and its employees have undergone extensive training to fully understand the different aspects of licensing and the exploration cycle. 

With assistance from the African Development Bank and the World Bank, the ministry has made substantial advances in developing a solid legal and regulatory framework through appropriate amendments to the petroleum law, the completion of a petroleum registry, the introduction of a downstream law, and resource sharing agreements within Somalia’s upstream sector. A new production sharing agreement model, including fiscal terms, has also been developed. 

In addition, the ministry has entered into key agreements with multi-client seismic provider, Spectrum, to acquire over 40,000 km of modern, high quality seismic data which will greatly assist the crucial decision-making processes of oil companies interested in conducting exploration activities offshore Somalia. These seismic surveys have already produced some extremely interesting findings across all three of Somalia’s offshore basins – the last true hydrocarbon exploration frontiers of the Indian Ocean. Seismic imaging gives strong indications of oil and gas potential, which the Somalians hope will be tested and proven in due course. 

With all this in place, Somalia recently announced its first offshore hydrocarbon licensing round, which will cover areas off central and southern Somalia and will exclude shallow water block concessions signed in 1988 with Shell and Exxon Mobil.


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