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Somalia’s first-ever licensing round for up to seven exploration blocks opened on August 4, 2020 and runs until March 12, 2021. The number of blocks on offer in the first round has been reduced to a maximum of 7 from an initial 15 to allow for better management of exploration.
According to subsurface data company TGS, just these 15 blocks have resource potential of 30 billion barrels of oil. That is more oil than the entire nation of Qatar in just a few of our blocks. This first round alone will transform Somalia from a poor nation to a wealthy nation.
In total, Somalia has 206 blocks which is an estimated 110 billion barrels of offshore oil which would make us the 6th most oil rich nation in the entire world. That’s without counting how much oil we have onshore. To put it into perspective, UAE has 97 billion barrels of oil.
Somalia’s Production Sharing Agreement is regarded as being amongst the most attractive to investors in the frontier basins. IOCs can recover their up-front development costs & earn a fair share profit even if oil prices fall, maximizing the profit going to the Somali people.
The PSA provides a highly attractive regulatory fiscal framework that is both competitive & equitable for both the people of Somalia and international oil companies. Somalia will NOT fall into the resource curse such as Congo & Nigeria but instead will take 65% of the oil profit.
According to @IA_Hussein, chairman and CEO of the newly created Somali Petroleum Authority, Somalia will hire private security firms as well as using the army to ensure the exploration goes smooth and safe. Al Shabaab won’t cause any problems nor be an issue since it is offshore.
In June of 2019, Somalia passed a law which allows for the creation of institutions to oversee the oil sector and for revenue sharing between the central government and federal states, among other objectives.
The world is moving towards renewable energy and with the rise of electrical vehicles, oil will be a thing of the past. It’s important for us to explore our oil as soon as possible, under favorable terms so we can lift millions out of poverty. Somalia will soon be an oil giant!
