Somalia’s government has agreed on an initial roadmap with a joint venture of Exxon Mobil and Royal Dutch Shell to explore and develop potential offshore oil and gas reserves, the Ministry of Petroleum and Mineral Resources has said
This co-created roadmap will enable the conversion of prior agreed concessions into production sharing agreements (PSAs) under the provisions of the petroleum law.
This builds on the agreement signed in Amsterdam on 21 June 2019 which led to the receipt of US$1.7mn from the Shell/Exxon joint venture from historical surface rentals and other incurred obligations on offshore blocks.
In adherence to the revenue sharing agreement, this payment was re-distributed among Somalia’s Member States for independent allocation. The processing and distribution of this sum among the member states demonstrate the strength of Somalia’s revenue-sharing agreement and provides a model for future treatment of funds arising from petroleum exploration and production.
The Ministry is committed to creating an attractive fiscal and regulatory environment for independent and international oil companies to enter offshore Somalia. The revenues from any potential resource will be shared and invested for the benefit of all Somali people.
Abdirashid Mohamed Ahmed, the minister of petroleum and mineral resources, said, “I am delighted we have agreed on an initial roadmap with the Shell/Exxon joint venture. This gives us confidence in our ability to explore any offshore hydrocarbon potential further. We have a long relationship with the Shell/Exxon joint venture and look forward to this continuing as we seek to provide the building blocks we need to grow our economy.”
