A detailed look into insurgents, election standoffs and minefields – a strategic report produced in partnership with Africa Oil Week
On August 4th, 2020 Somalia initiated its first ever offshore licensing round, opening up one of the final global frontier regions for oil and gas exploration. Seven blocks are on offer up until March 12th, 2021.
Somalia finds itself at a critical juncture in its development. The decision to initiate an offshore oil licensing round – the first in the country’s history – signals the potential resurrection of its once-promising oil & gas industry. If it is proven that Somalia is endowed with roughly 100 billion barrels of oil – as suggested by preliminary surveys – the country could emerge as a hydrocarbon powerhouse on the African continent. Such an outcome would lift Somalia from its chronically fragile and undeveloped status, and perhaps ease the political tensions that have been exacerbated by competition over the country’s limited pool of resources. Tellingly, investors have already eyed Somalia, with the likes of Shell and ExxonMobil said to be interested in prospecting in the Horn of Africa country. However, realising this potential and developing a fully functional oil & gas industry will require Somalia to overcome its above-ground risks – of which there are many.