Royal Dutch Shell and Exxon Mobil Corp. are looking to return to Somalia ahead of an oil block bid round later this year, the East African country’s oil ministry said.
Shell and Exxon Mobil had a joint venture on five offshore blocks in Somalia prior to the toppling of dictator Mohamed Siad Barre in the early 1990s.
The country 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 exploration and development of the five offshore blocks was suspended in 1990 under what is known as a “force majeure,” but Shell and Exxon Mobil have accrued rentals to the government since then, Shell said in a statement.
Exxon Mobil officials were not immediately available for comment.
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 21, 2019, and settles issues relating to surface rentals and other incurred obligations on offshore blocks,” the ministry said.
The force majeure remains in place, regardless of the recent development, Shell added.
The parties have also agreed to hold talks to convert their old contracts in line with the new petroleum bill that was passed earlier this year.
Somalia hopes to allocate 15 offshore blocks with a potential bid date scheduled for November. A roadshow is being organized in Houston for 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.
Recommended Reading
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
CEO: Continental Adds Midland Basin Acreage, Explores Woodford, Barnett
2024-04-11 - Continental Resources is adding leases in Midland and Ector counties, Texas, as the private E&P hunts for drilling locations to explore. Continental is also testing deeper Barnett and Woodford intervals across its Permian footprint, CEO Doug Lawler said in an exclusive interview.
US Gas Rig Count Falls to Lowest Since January 2022
2024-03-22 - The combined oil and gas rig count, an early indicator of future output, fell by five to 624 in the week to March 22.
Chevron Hunts Upside for Oil Recovery, D&C Savings with Permian Pilots
2024-02-06 - New techniques and technologies being piloted by Chevron in the Permian Basin are improving drilling and completed cycle times. Executives at the California-based major hope to eventually improve overall resource recovery from its shale portfolio.
US Drillers Cut Oil, Gas Rigs for Fourth Week in a Row-Baker Hughes
2024-04-12 - The oil and gas rig count, an early indicator of future output, fell by three to 617 in the week to April 12, the lowest since November.