Oil and Natural Gas in Somalia

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Somalia has no proven oil reserves, and only 200 billion cubic feet of proven natural gas reserves. Somalia currently has no hydrocarbon production. Oil seeps were first identified by Italian and British geologists during the colonial era. Exploration activities were focused in northern Somalia, and several foreign firms, including Agip, Amoco (now part of BP), Chevron, Conoco and Phillips, held concessions in the area. The firms all declared force majeure following the collapse of the central government.
Exploration activity remains hindered by the internal security situation, and the multiple sovereignty issues.
The Somali state of Puntland set up a new oil ministry to oversee a growing hydrocarbon sector, according to media reports. Mohamud Musse Hersi, the president of the semi-autonomous region, named Hassan Osman Mohamud as the new minister for oil and minerals along with the appointment of a new government. The move comes on the back of a growing international interest in Puntland's oil and gas resources. Chinese national oil companies CNOOC and China International Oil and Gas are among the companies said to have signed agreements for Puntland concessions with Puntland's current president. Canada reportedly sent an oil delegation to brief the Somalian leaders on its planned exploration activities.
  • Natural gas proved reserves: 5.663 billion cu m (1 January 2005 est.)
  • In February 2001, Total signed an exploration agreement with the Transitional National Government (TNG). The twelve-month agreement granted Total the rights to explore in the Indian Ocean off southern Somalia. Hassan Farah, TNG's Minister for Water and Mineral Resources, stated that the government would provide security during the exploration activities. Several factional leaders denounced the agreement, and stated that the TNG did not have the authority to sanction the agreement, nor the power to guarantee the safety and security of the exploration operations.
  • In May 2001, Somaliland signed an agreement with U.K.-registered Rovagold Ltd and two Chinese firms, Continental Petroleum Engineering Company (CPEC) and China Petrochemical Cooperation (CPC), for the right to explore for oil.
  • Dubai-based Zarara Energy also signed an exploration agreement with Somaliland. The Somaliland government has said it will honor, until they expire, the existing contracts foreign companies signed with the Barre regime that are in their territory. None of the firms have resumed operations in Somaliland.

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