Somalia Tries to Lure Back Oil Giants
Some of the world's oil giants are cautiously eyeing proposals that they reactivate exploration drilling contracts in Somalia
David Sapsted
9 DECEMBER 2014
A $37 million seismic survey of onshore and offshore potential reserves has been conducted by London-based Soma Oil and Gas and the results are said to be encouraging.
Although the potential of the Horn of Africa is acknowledged in the industry and has already been tentatively explored by BP, Royal Dutch Shell, Exxon Mobil and Chevron, the security situation in the country, widespread corruption and UN allegations that weapons are being supplied to Islamist extremists have made caution the watchword.
The Somali government claims the nation will be producing oil within six years and is trying to convince foreign investors that, with the assistance of African Union troops, it is making progress against the Islamist insurgents of al-Shabab despite continuing attacks, both in the capital and elsewhere.
“You would have to be very brave or very mad to attempt onshore drilling,” one oil industry security analyst said on Tuesday. “However, offshore might be a different proposition, though support facilities could still be a problem. And the threat from Somali pirates has not completely disappeared.”
However, Bob Sheppard, Soma Oil and Gas chief executive, told the BBC, “We were able to do (the seismic survey) with zero security incidents. What we've been able to demonstrate is that you can conduct offshore operations safely and securely.
“The government have recognised they need to stimulate exploration. They need to stimulate the creation of a hydrocarbon regime because they are in a prospective area.”
Steve Robertson, a director with energy analysts Douglas Westwood, described East Africa as having “huge untapped potential”. He added, “It has been regarded in recent years as one of the hottest opportunities available to both independent and larger international oil companies,” he told the BBC.
Most oil companies withdrew from the country almost a quarter-century ago when civil war first erupted. Abdulkadir Abiikar Hussein, the director of exploration at the Ministry of Petroleum and Mineral Resources in Mogadishu, says there is now “a rush” to start drilling in Somalia.
“The Indian Ocean is safe enough these days,” he said. “There was the problem of piracy and piracy has dwindled. In terms of al-Shabab and other problems, that is a continental problem, but not in the Indian Ocean, so as a priority the Indian Ocean has to be explored first.”
David Sapsted
9 DECEMBER 2014
A $37 million seismic survey of onshore and offshore potential reserves has been conducted by London-based Soma Oil and Gas and the results are said to be encouraging.
Although the potential of the Horn of Africa is acknowledged in the industry and has already been tentatively explored by BP, Royal Dutch Shell, Exxon Mobil and Chevron, the security situation in the country, widespread corruption and UN allegations that weapons are being supplied to Islamist extremists have made caution the watchword.
The Somali government claims the nation will be producing oil within six years and is trying to convince foreign investors that, with the assistance of African Union troops, it is making progress against the Islamist insurgents of al-Shabab despite continuing attacks, both in the capital and elsewhere.
“You would have to be very brave or very mad to attempt onshore drilling,” one oil industry security analyst said on Tuesday. “However, offshore might be a different proposition, though support facilities could still be a problem. And the threat from Somali pirates has not completely disappeared.”
However, Bob Sheppard, Soma Oil and Gas chief executive, told the BBC, “We were able to do (the seismic survey) with zero security incidents. What we've been able to demonstrate is that you can conduct offshore operations safely and securely.
“The government have recognised they need to stimulate exploration. They need to stimulate the creation of a hydrocarbon regime because they are in a prospective area.”
Steve Robertson, a director with energy analysts Douglas Westwood, described East Africa as having “huge untapped potential”. He added, “It has been regarded in recent years as one of the hottest opportunities available to both independent and larger international oil companies,” he told the BBC.
Most oil companies withdrew from the country almost a quarter-century ago when civil war first erupted. Abdulkadir Abiikar Hussein, the director of exploration at the Ministry of Petroleum and Mineral Resources in Mogadishu, says there is now “a rush” to start drilling in Somalia.
“The Indian Ocean is safe enough these days,” he said. “There was the problem of piracy and piracy has dwindled. In terms of al-Shabab and other problems, that is a continental problem, but not in the Indian Ocean, so as a priority the Indian Ocean has to be explored first.”
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