Somaliland is considering its first bidding round for oil blocks since 2009 as increasing stability begins to attract more foreign investors.
“If we open up new acreage, we’re definitely thinking of a bid round,” Hussein Abdi Dualeh, minister of minerals and energy in the autonomous Horn of Africa territory, said in an interview in London yesterday.
Investors made no bids in the previous round because of concerns about security and the status of Somaliland, which is not recognized as a sovereign state following its declaration of independence from Somalia in 1991. Dualeh said investors’ perceptions had changed thanks to the region’s political stability relative to Somalia, citing four companies that received onshore oil licenses since 2012, including London-based Genel Energy Plc (GENL), headed by BP Plc’s former chief executive officer, Tony Hayward.
“Now we have a critical mass and we’re starting to become a known quantity in the oil patch,” said Dualeh.
The other three oil and gas explorers in Somaliland are RAK Gas, owned by the government of Ras al-Khaimah in the United Arab Emirates, Oslo-based DNO International ASA (DNO), and Yemen-based Ansan Wikfs Hadramaut Ltd.
While commercial quantities of oil and gas haven’t been discovered, “large accumulations are highly likely”, said Dualeh. Genel is targeting about 2 billion barrels of hydrocarbons in its blocks, according to its website.
The Somaliland government has decided not to award offshore licenses in the near future as “it’s much more complicated and costly than going onshore,” he said.
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