CAPE TOWN (Reuters) – Somalia expects to announce the winners of its first oil and gas licensing round early next year, as the country seeks petrodollars to help rebuild its struggling economy, a senior government oil official said on Wednesday.
Battered by violence and an Islamist insurgency since clan warlords overthrew a dictator in 1991, Somalia is offering seven deepwater offshore blocks in its maiden licensing round in one of the world’s last frontier markets.
The oil and gas auction officially opened on Tuesday.
“We are expecting that in the first quarter of next year to finalise and award the block contracts,” Ibrahim Ali Hussein
told Reuters in his first interview with international media since his appointment last week as the CEO of the Somali Petroleum Authority (SPA).
He said the coronavirus pandemic had delayed talks between the government and a joint venture of legacy rights holders Shell and Exxon Mobil to convert their existing concession into a production sharing agreement (PSA).
“If there was not coronavirus, the roadmap that we agreed … was to get the contract back before the end of this year, December,” he said.
Converting the concession into a PSA would also help end a force majeure by the oil majors that have been in place since 1990, Hussein said. Shell and Exxon hold exclusive petroleum exploration and production rights over five shallow-water offshore blocks.
“We have an ongoing and constructive dialogue with the Somali authorities about a roadmap potentially to convert the existing concession to a production sharing agreement,” a Shell spokesman said.
No-one at Exxon was immediately available to comment.
