Somalia to announce plans for first oil licensing round in December
Somalia will
announce plans in December for its first ever oil and gas licensing round, its
oil minister said on Tuesday, as the frontier market looks to attract new
investment after decades of civil strife.
At least three
mortar bombs were fired last month at Mogadishu’s international airport, the
latest attack in a wave of violence that has afflicted the Horn of Africa
nation since clan warlords overthrew a dictator in 1991.
Today much of the
fighting is between rival clans and an Islamist insurgency, with Al
Qaeda-aligned Al Shabaab, which is seeking to topple the U.N.-backed
government, launching attacks in Mogadishu and across the country.
The Ministry of
Petroleum and Mineral Resources said the minister will announce in December
when it plans to launch the bid process in 2020.
“We are presenting
up to 15 blocks,” Minister of Petroleum and Mineral Resources Abdirashid
Mohamed Ahmed told Reuters on the sidelines of an African oil and gas
conference in Cape Town.
He said seismic
data commissioned for the government was encouraging and indicated that the 15
blocks could contain around 30 billion barrels of oil.
Ahmed emphasised
the new blocks were far from the maritime boundary with Kenya that is currently
the subject of a dispute at the International Court of Justice.
He added that
international naval blockades had almost totally eradicated offshore piracy at
the former hotspot for maritime hijackings.
“Somalia was known
before for piracy, terrorists, unrest and all that, but the federal government
of Somalia is doing its best to stabilise the country,” Ahmed said.
“For the past
decade or so there has not been one casualty of piracy, so offshore is safe to
invest.”
He said new oil
and gas investments should create more jobs, help prevent young people turning
to crime and spread peace in the country.
“Somalia has a
roadmap we can follow after we produce oil, so there will be no (resource)
curse here in Somalia,” he said, referring to a tendency among some
resource-rich countries to suffer from economic stagnation.
Ahmed said the
president was expected to sign into law new petroleum legislation, currently
before parliament’s upper house, before year-end.
This would help
pave the way for ExxonMobil and Shell to return to the country where they held
legacy blocks from the 1990s. Last month
the two companies paid $1.7 million owed to Somalia for leasing these offshore
blocks, although operations there remain suspended.
“Once all the
legislation is done we hope they will come back soon,” Ahmed said.
Source: Reuters
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