Somalia has agreed on an initial roadmap with a joint venture between ExxonMobil and Shell on offshore exploration and development, the country’s petroleum ministry said on March 2.
Exxon and Shell held rights to five offshore blocks prior to the overthrow of former dictator Mohamed Siad Barre in 1991, but these concessions were subsequently suspended. The pair agreed last year to pay Somalia $1.7mn relating to past rental fees and other obligations at the projects.
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The new roadmap paves the way for the conversion of the previously agreed concessions into production-sharing agreements (PSAs), the ministry explained.
“I am delighted we have agreed on an initial roadmap with the Shell/Exxon joint venture,” petroleum minister Abdirashid Mohamed Ahmed said in a statement. “This gives us confidence in our ability to explore any offshore hydrocarbon potential further.”
Last month Somali’s president Mohamed Abdullahi Farmajo signed new petroleum legislation into law, aimed at opening up the war-torn country to oil and gas development. The legislation introduced a new PSA model and was aimed at providing “fair treatment” to holders of concessions prior to 1991. It also established the Somali National Oil Co. (Sonoc), which is expected to take part in upstream operations.