Somalia passed a petroleum sector law on May 20, paving the way for exploration in its waters that could potentially transform the troubled country’s economy if hydrocarbon riches are found.
The new legislation allows for the creation of institutions to oversee the sector and for revenue sharing between the central government and federal states, among other objectives, the ministry of petroleum and mineral resources said in a statement.
“This is a landmark in the development of Somalia’s natural resources, which will be transformational for the country’s development,” the ministry said in the statement.
Hydrocarbon discoveries in Uganda and Kenya and huge gas finds in Mozambique and Tanzania have fanned investor interest in east Africa’s hydrocarbons potential.
Somalia has been mired in insecurity and lawlessness since the toppling of dictator Mohamed Siad Barre in the early 1990s.
However, early this year Somalia began preliminary preparations for a licensing round for 15 exploration blocks covering a total of 75,000 sq km, according to the statement.
“With the passage of the petroleum law it is anticipated that PSAs [production-sharing agreements] will subsequently be signed, which will enable exploration activity to then commence," the statement said.
Somalia is currently battling a threat from Islamist group al Shabaab which frequently carries out bombings in the capital Mogadishu and other parts of the country.
Al Shabaab wants to overthrow the central government and establish its own rule in the country, based on its strict interpretation of Islamic sharia law.
Recommended Reading
Continental Resources Sees Homecoming in Powder River Basin Acquisition
Continental Resources’ acquisition of Powder River Basin assets in Wyoming is a homecoming of sorts for the company, says Founder and Executive Chairman Harold Hamm.
Honoring Women In Energy
Hart Energy and Oil and Gas Investor will recognize the accomplishments of 25 Influential Women in Energy alongside this year’s Pinnacle Award recipient Dr. Sharon L. Wood, dean of the Cockrell School of Engineering at The University of Texas at Austin.
Howard Energy Partners to Acquire Corpus Christi Facility from MPLX
Howard Energy Partners agreed to acquire the Javelina Facility, which provides refinery services in Corpus Christi, Texas, from an affiliate of MPLX for an undisclosed sum.