Somalia expects to announce the winners of its first oil and gas licensing round early next year, as the country seeks petro dollars to help rebuild its struggling economy, a senior government oil official said on Wednesday.
Map of the initial 15 blocks offshore Somalia. Source: Spectrum GEO.
Battered by violence and an Islamist insurgency since clan warlords overthrew a dictator in 1991, Somalia is offering seven deep water offshore blocks in its maiden licensing round in one of the world’s last frontier markets. The oil and gas auction officially opened on August 4.
“We are expecting that in the first quarter of next year to finalise and award the block contracts,” Ibrahim Ali Hussein told Reuters in his first interview with international media since his appointment last week as the CEO of the Somali Petroleum Authority (SPA).
The government had previously mooted offering 15 blocks in this licensing round but cut this down to seven due to capacity constraints, Hussein, a former advisor to Somalia’s energy minister, said. Seismic data previously indicated the 15 blocks could contain around 30 billion barrels of oil. The cut to seven was done due to capacity constraints.
He said the coronavirus pandemic had delayed talks between the government and a joint venture of legacy rights holders Shell and Exxon Mobil to convert their existing concession into a production sharing agreement (PSA).