Somalia petroleum Minister Hon.Abdirashid Mohamed Ahmed has boosted his country’s endowment in hydrocarbons owing to its favorable geological structure and it possess huge opportunities for investors looking to enter the East African market. Mohamed Ahmed made this known during the
Africa Oil & Power conference.“Nowhere is the contribution that the energy industry can make to civil society and economic development greater than in Somalia,” he said, noting that the sector has the potential to greatly enhance stability and economic development. He further stated that the government has created enabling environment and good policy framework in its petroleum sector to encourage prospective investors to participate in building the country’s economy. Recently, the country passed a new petroleum law which enabled it to make progress in exploration and development, and attract interest from oil and gas majors ExxonMobil and Shell.“My ministry worked successfully with the six federal member states to develop an equitable and transparent framework for development, focused on the greater good of Somalia and all its people, whilst ensuring that we are highly competitive internationally to attract investment by delivering returns that are consistent with the risks and rewards of developing our off-shore industry,” said the minister. The minister also spoke on the country’s current international “Nowhere is the contribution that the energy industry can make to civil society and economic development greater than in Somalia.” road show which will showcase
the exploration opportunities available in its hydrocarbons sector and the attractiveness of the country’s production sharing agreement (PSA) model for offshore oil exploration and development. “This includes seismic data recently shot by Spectrum covering 20,185 km. The current licensing round is in respect of up to 15 blocks, covering a total area of approximately 7,500 square miles. The bid round will follow shortly after to ensure that the world knows: Somalia is open for business.” “By equitably linking of royalties and share of revenue closely to the price of oil, the Somalia PSA ensures that IOCs can recover their up-front development costs and earn a fair share profit even if oil prices fall, whilst maximizing the profit going to the Somalian people,” He posited.“We want strong companies, companies that have done things in other countries,” said Cisse. “We want to make sure that in terms of obligation of work that things will go quickly.” Two exploration companies Eni SpA and Total SA were awarded exploration licenses earlier this year, while agreements for two other blocks are yet to be concluded. “Our policy now is that the terms we agreed works for both parties,” Cisse said.“When we don’t agree, we don’t sign.” According to Cisse,there three of the five blocks opened for licensing bringing the total number in the country to 51 blocks, Four of these are in production and 28 are under exploration.