Bad Timing: Somalia President Signs New Oil Bill into Law to Open Up a New Frontier Market

[Tom Kirkman + 8,860]

Not really a great time to try to attract new investment for Oil & Gas in Somalia.

Somalia President Signs New Oil Bill into Law

Somali President Mohamed Abdullahi Farmajo has signed landmark petroleum legislation into law to help open up a new frontier market, the oil ministry said on Saturday. 

The upper house of Somalia’s parliament in January approved the petroleum law aimed at providing a regulatory framework that will help attract investment in exploration by major oil companies. 

"The Petroleum Law demonstrates the capacity of the Somalian people to unite in a historic effort to work together to build an equitable, prosperous and peaceful nation," Farmajo said in a statement. 

The new law establishes revenue-sharing between the central government and states as well as a legal framework for an industry the country hopes will bring jobs and investment after decades of conflict. 

Plagued by civil strife, Somalia currently does not produce any oil but production could transform the economy as seismic data has shown there could be significant oil reserves offshore. The government hopes the petroleum law will entice big oil companies like ExxonMobil and Shell to return to the country where they held legacy blocks from the 1990s.   ...

 

[Dan Warnick + 6,100]

The start of a new less sophisticated Iran?  Using oil money to support and export terrorism?  There's always a niche!

[Douglas Buckland + 6,308]

Recently someone commented on the impending demise of conventional oil. Although the timing seems a bit off as Tom pointed out, this article shows that there are still conventional plays waiting to be explored. I doubt that Somalia is the only place where seismic surveys have been performed, the results look promising, but the security/political environment prevents further exploration.

The article mentions ‘significant oil reserves offshore’, with a good chance that this is conventional jack-up rig country. I also assume that the seismic work was only performed off of the coast. In many cases, the oil bearing strata will extend onshore as well.

If you look at the ‘recent’ successful exploration all over the African continent, I would say conventional oil still has some life left in it....assuming that the price of oil makes it worthwhile.