Page 13 - AfrOil Week 20 2020

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Somalia will auction up to seven offshore blocks (Image: Spectrum Geo)
Somalia gears up for first offshore licensing round
SOMALIA
SOMALIA’S Ministry of Petroleum and Min- eral Resources said last week that it had begun preparing to launch the country’s first offshore bidding round.
In a statement, the ministry said it would begin accepting offers for offshore blocks between August 4, 2020, and March 12, 2021. It also explained that it would be conducting the auctions online, in line with public health measures introduced to curb the coronavirus (COVID-19) pandemic.
According to the statement, Somalia’s gov- ernment will include up to seven blocks in the licensing round. The ministry did named the licence areas that are slated for sale as Blocks 152, 153, 164, 165, 177, 178 and 204. It also described them as “among the most prospective areas for hydrocarbon explorations and production in Somalia.”
Minister of Petroleum and Natural Resources Abdirashid Mohamed Ahmed said that Moga- dishu would work to ensure that the auctions would be carried out in a transparent and fair manner. He also stated that Somalia’s govern- ment was committed to using any revenues it earned from oil and gas projects to benefit the whole country.
“The opportunities for the international exploration and development majors are enormous,” he said. “Somalia is committed
to attracting investment and promoting part- nership and business in all segments of the oil and gas industry value chain. This event is the starting point to allow the Somali government to better showcase the vision that our country has for our petroleum and gas industry to potential foreign investors.”
Ahmed further noted that Mogadishu had already taken several important steps to pre- pare for opening the oil and gas sector up to investors. Specifically, he said, the government had secured approval for and enacted a new Petroleum Law earlier this year. This legislation sets the parameters for the sharing of future oil and gas revenues between Somalia’s federal administration, federal member states and local communities, he explained. He noted that the government had already “road-tested” these provisionsbyusingthemtodistributethefunds received as rental payments from ExxonMobil (US) and Royal Dutch Shell (UK/Netherlands), both of which had secured rights to licence areas in the early 1990s.
The minister also noted that the Petroleum Law would enable Somalia to sign produc- tion-sharing contracts (PSCs) with foreign investors. The legislation is designed to help the country use oil and gas revenues as a catalyst for sustainable and dynamic economic develop- ment, he said. ™
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