TDPel Media
Friday April 1, 2022
H.E. Abdirashid Mohamed Ahmed, the Minister of Petroleum and
Mineral Resources of Somalia, will return to Africa’s premier event for the
energy sector, African Energy Week (AEW), which will take place from 18 – 21
October 2022 in Cape Town. Representing one of Africa’s most underexplored
markets, H.E. Ahmed remains focused on frontier exploration as he seeks global
investment to kickstart the country’s high potential sector.
An engineer by profession, H.E. Ahmed is leading efforts by
the Somalian government to increase oil and gas exploration through investment
as well as the participation of international oil companies (IOC). Due to
Somalia’s close proximity to hydrocarbon-rich Arab countries such as Yemen and
Saudi Arabia, stakeholders are highly optimistic about the country’s potential
reserves. What’s more, past seismic data processed by energy insight company,
TGS, have indicated the presence of up to 30 billion barrels of oil reserves in
blocks 152, 153, 164, 165, 177, 178, and 204, which the Ministry of Petroleum
and Mineral Resources offered for exploration in 2020 under the country’s first
offshore licensing round. The country is also estimated to house an estimated
0.20 trillion of natural gas reserves, however, exploration and production has
been hindered by political instability and a lack of adequate investments.
As a result, the Ministry of Petroleum and Mineral
Resources, under the leadership of H.E. Ahmed aims to change this and has in
recent years focused on reforming the country’s regulatory framework with the
introduction of the Somali Petroleum Law in 2020 which is designed to maximize
the exploration and exploitation of hydrocarbons and to promote increased
cooperation between IOCs and consortiums. In addition, the ministry established
the Somali National Oil Company and the Somali Petroleum Authority to operate
and regulate the sector – in line with the government’s strategy to develop an
investment-attractive regime. Furthermore, the Revenue-Sharing Agreement was
developed to detail how revenues generated from oil and gas would be supervised
and managed.
In the wake of these regulatory reforms, Somalia’s oil
market has recorded impressive growth rates and increasing stability in recent
years. In this regard, the government is optimistic that global oil majors such
as Shell and ExxonMobil will resume their operations in key offshore basins–
the two majors had declared force majeure, but in 2019 paid $1.7 million to
lease offshore blocks for the next 30 years. The ministry is also expected to
award exploration licenses for the remaining eight blocks that were part of the
country’s first offshore licensing round in 2020 but were delayed due to the
pandemic and calls by industry stakeholders to extend the bidding period.
With statutory bodies now in place to negotiate oil
exploration and production deals, the ministry is now prioritizing bringing
companies with the right expertise and capabilities on board. By exploiting its
energy resources, Somalia could become a regional, continental and
international energy hub. With only 36% of Somalia’s population having access
to electricity in 2019, according to the Energy Progress Report, hydrocarbon
resources present a huge opportunity for the country to address its domestic
energy needs.
With H.E. Ahmed once again attending and participating at
AEW in 2022, an opportunity has risen for the minister, investors and energy
companies to discuss opportunities within Somalia’s energy sector and to
negotiate and sign deals that can completely change the country’s energy and
economic trajectory.
“The progress made by H.E. Abdirashid Mohamed Ahmed and his
ministry in reforming Somalia’s energy policies in recent years is remarkable,”
states NJ Ayuk, Executive Chairman of the AEC, adding that, “The next phase now
needs to be the rapid signing of deals and exploitation of hydrocarbons. With
the investment window for hydrocarbons quickly closing, AEW 2022 provides the
perfect platform for the Somalian government and companies and investors interested
in maximizing the significant opportunities present within the country to
discuss, negotiate and close deals.”
Distributed by APO Group on behalf of African Energy Chamber.