Somalia's Planned Oil Search Under Threat

February 21, 2019

Some of the delineated offshore Somali blocks that were recently auctioned in London (Image: Spectrum)
Some of the delineated offshore Somali blocks that were recently auctioned in London (Image: Spectrum)

Somalia, a country that has been trying, albeit with little success, to shed off the image of a nation in turmoil because of its insecurity, instability and a preferred haven for for militant groups, has big plans for auctioning some of its offshore blocks in 2019 but the recurring maritime boundary dispute with her neighbor to the west, Kenya, needs to be conclusively resolved if the expected licensing round is to register progress.

Kenya has claimed some of its offshore oil and gas on the Indian Ocean have been auctioned by Somalia to “the highest predatory bidders from the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Norway among others.”

The auction that took place in London on February 7 has re-ignited a long-standing maritime dispute between the two countries and, which is pending the International Court of Justice.

“This unparalleled affront and illegal grab at the resources of Kenya will not go unanswered and is tantamount to an act of aggression against the people of Kenya and their resources,” said Kenya's Ministry of Foreign Affairs in a statement last week.

“This outrageous and provocative auction deserves and will be met with a unanimous and resounding rejection by all Kenyans as well as all people of goodwill who believe in the maintenance of international law and order and the peaceful and legal resolution of disputes,” said the Ministry that is headed by Dr. Monica Juma.

“Kenya has willingly and procedurally enjoined itself to the international legal processes of international boundary disputes, including but not limited to, bilateral negotiations and subservience to the International Court of Justice where this matter of the Kenya/Somalia boundary currently rests,” the ministry said in the strong-worded statement.

“By carelessly ignoring the internationally acceptable norms of boundary dispute resolution and or political and diplomatic disagreements, the Government of the Federal Republic of Somalia has once again demonstrated that it has yet to attain and embrace the political maturity and diplomatic stance of a normal, well adjusted, and properly functioning modern government,” it added.

But this is not the first maritime boundary dispute in Africa, many of them linked to unexploited oil and gas resources, with previous ones confirming the likelihood of delays in hydrocarbon project developments as warring countries fight it out in international corridors of justice or opting to pull back from their hardline positions to reach an amicable resolution.

In Ghana, the development of the country's Tweneboa, Enyenra, Ntomme (TEN) offshore fields was delayed for a time as a dispute erupted pitting the country against her neighbour Ivory Coast over their maritime boundary. The dispute raged until September 2017 when the Tribunal for Law of the Sea ruled in favour of Ghana paving way for international oil companies to resume plans for production of discovered hydrocarbon resources.

A Similar dispute is simmering in East Africa between Tanzania and Malawi over the control of Lake Malawi also called Lake Nyasa. The dispute appear to have escalated after the discovery of huge natural resources in Tanzania and Mozambique. The matter remains unresolved.

But in a rare dispute resolution achievement, Equatorial Guinea and Cameroon, hitherto quarreling over oil and gas fields that overlap along the countries' common boundary, agreed to jointly develop the hydrocarbon resource for the benefit of people in these two West Africa nations.

Even as Kenya shouts louder about the auctioning of her offshore oil and gas blocks by Somalia, the latter has. through the Ministry of Petroleum and Mineral Resources, offered 15 offshore blocks for auction out of the earlier announced 206 ahead of the pre-qualification that is due July 11, 2019.

The licensing round, which closes in November, comes nearly four years after  multi-client seismic services company, Spectrum Geo, completed the acquisition and processing of 20,185 km of 2D long-offset seismic data, under a contract by the Somali government.

In addition, Somalia has since the last quarter of 2018 tried to explain to potential international oil companies about their new legal & regulatory framework, petroleum laws, local capacity, fiscal terms, round timings and other conditions according Spectrum.

Somalia looks determined to exploit her hydrocarbons resources taking advantage of the country's strategic location and the fact that it has one of the biggest offshore coastline in Africa.

“The licensing of offshore Somalia is strategic, very big and out into the sea and there should be no concerns about security,” said Karar Doomey, Director General in Ministry of Petroleum and Mineral Resources at the November 2018 Africa Oil Week.

“The government is working very hard and there is now less corruption, we have done well with the fiscal regime as well as the Petroleum Bill and also the Investment Bill,” he said.

“Somali is thought to be the pot where all the oil is cooked and the gas is just around so we hope investors will find that attractive and also our production sharing contract model is quite good as well as the investment laws,” added Doomey.



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