SOMALIA RISING AGAIN WITH THE RETURN OF ROYAL DUTCH SHELL IN 2015

Somalia is conducting offshore surveys in hopes of attracting explorers including Royal Dutch Shell Plc two decades after the outbreak of a bloody civil war drove foreign investors away.

The East African country plans to hold a licensing tender next year after Soma Oil and Gas, funded by Russian billionaire Alexander Djaparidze, completes the seismic study, according to Abdullahi Haider, a federal government adviser. Somalia, with no proven reserves, has been in talks with Shell about resuming work suspended at the start of the war in 1991, said Abdirizak Omar Mohamed, an adviser to President Hassan Sheikh Mohamoud.

“Once we settle all the issues between the federal-central government and regional authorities, the petroleum law, the establishment of the regulatory framework, then optimistically there will be full-scale exploration,” Haider said in an interview from Mogadishu. “This time next year we could have the possibility of seeing major oil companies coming in.” 

International oil companies are weighing a return to the Horn of Africa nation as the political situation stabilizes and pirate attacks subside. Somalia wants to catch up with Kenya, Tanzania and Mozambique to the south, where recent discoveries promise East Africa’s first oil exports as soon as 2016.

“We have expressed interest in appraising opportunities for future projects in Somalia,” said Julia Dudley, a London-based spokeswoman at Shell. The Anglo-Dutch company holds rights to blocks M3 to M7 where it still has force majeure in place, exempting it from exploration obligations.

Foreign investors continue to face obstacles, from problems transferring funds to the country to security threats from al-Shabaab militants, who have waged an insurgency since 2007 to try to topple the Western-backed government and impose Shariah, or Islamic law.

News by: Bloomberg Businessweek