Audio By Carbonatix
Royal Dutch Shell and Exxon Mobil are looking to re-enter the market in Somalia ahead of an oil block bid round taking place later this year, the country’s oil ministry said in a statement.
Shell and Exxon Mobil had a joint venture there prior to the toppling of dictator Mohamed Siad Barre in the early 1990s.
Somalia has been mired in insecurity since Barre left and is battling Islamist group al Shabaab that frequently carries out bombings in the capital Mogadishu and elsewhere in the country.
The country currently does not produce any oil but production could transform the economy as early stage seismic data has shown there could be significant oil reserves offshore.
“(An) agreement was signed in Amsterdam on June 21st 2019 and settles issues relating to surface rentals and other incurred obligations on offshore blocks,” the ministry said.
The parties have also agreed a plan to convert their old contracts in line with the a new petroleum bill that was passed earlier this year.
Somalia hopes to allocate 15 offshore blocks with a potential bid date schedule for November. A roadshow is being organised in Houston, Texas in late September or early October.
Somalia has also passed a revenue sharing agreement, splitting revenue with oil producing states but has not yet decided on the share the government will keep in the blocks it awards.
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