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Wednesday, 4 December 2013

Somaliland signs agreement with fourth oil explorer

Somaliland expects to sign an agreement with a fourth international energy company this week to begin exploring for oil in the semi-autonomous region, Energy Minister Hussein Abdi Dualeh said, Bloomberg reports.

An accord with a Middle East-based company, which Dualeh declined to identify, has been completed. The other three companies already operating in the country are London-based Genel Energy, RAK Gas, owned by the government of Ras al-Khaimah in the United Arab Emirates, and Oslo-based DNO International.

“All talks are concluded” with the fourth company, Dualeh said. “It’s just a matter of inking the deal, which hopefully is going to be this month.”

Somaliland, situated at the tip of the Horn of Africa, declared independence from Somalia in 1991, though no country has officially recognised it as a sovereign state. Somaliland and the neighboring region of Puntland are part of a southward extension of the “lucrative geologic framework of the Arabian Gulf” that includes Saudi Arabia, according to Osman Salad Hersi, an associate geology professor at the University of Regina in Canada. Saudi Arabia is the world’s biggest oil producer.

Previous attempts to encourage exploration in the region foundered because of perceptions among investors that Somaliland has the same security concerns as neighbouring Somalia, where Islamist militants have been trying to establish an Islamic state since at least 2006.