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Somalia offers 206 oil blocks in first round of open acreage auction
The government of Somalia attended this year’s Africa Oil Week in Cape Town to announce a first round of bidding on offshore acreages in 206 blocks, mainly in southern Somalia. Engineer Karar Shukri Doomey, Director General in the Ministry of Petroleum and Mineral Resources of the Federal Republic of Somalia also addressed concerns about investment security in the country.
Thu, 15 Nov 2018 14:51:34 GMT
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AI Generated Summary
- Somalia unveils plans for an inaugural bidding round on 206 offshore oil blocks at Africa Oil Week, setting the stage for increased investment in the country's oil and gas sector.
- The government emphasizes the strategic importance of offshore exploration in southern Somalia, assuring potential investors of enhanced investment security and transparent regulatory frameworks.
- Somalia's attractive Petroleum Sharing Agreement model, favorable investment terms, and untapped potential position the country as a promising destination for investors seeking high-potential ventures within the African oil and gas market.
The federal government of Somalia made a significant announcement at this year's Africa Oil Week in Cape Town, revealing plans for the first round of bidding on offshore acreages in 206 blocks, predominantly located in southern Somalia. Engineer Karar Shukri Doomey, the Director General in the Ministry of Petroleum and Mineral Resources of the Federal Republic of Somalia, shared insights on the upcoming auction and addressed concerns regarding investment security in the country. The government disclosed that on the 7th of February 2019 in London, Somalia will host its first-ever bidding round, offering multiple offshore acreages up for licensing. Spectrum ASA, a seismic company in possession of Somalia's data, will facilitate the auction of some of the most promising blocks in the southern region. While acknowledging historical reservations about investing in onshore Somalia, the government aims to shift the focus to offshore ventures to ensure a more secure investment environment. The vast offshore potential of Somalia's territory is deemed strategic and promising, with the government actively working to enhance regulatory frameworks and incentivize investor participation. The government assured that rigorous regulatory measures are in place to guarantee a fair and transparent bidding process. Somalia's emphasis on offshore exploration necessitates specific infrastructure, particularly floating production systems, to support drilling and extraction operations. The country's current lack of refining capacity positions it to export crude oil directly to the market once extraction is successful. Engineer Karar Shukri Doomey expressed satisfaction with the engagement at Africa Oil Week, noting positive discussions with key industry players and governmental representatives. Somalia's allure as an investment destination lies in its strategic location, boasting Africa's longest coastline and a potential for significant oil and gas discoveries. It is viewed as a frontier economy, offering untapped opportunities for investors seeking high-potential ventures. The country's Petroleum Sharing Agreement (PSA) model and attractive investment terms further enhance its appeal. Somalia's proximity to neighboring countries with substantial oil and gas reserves underscores its potential as a lucrative investment hub within the African continent.
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