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Somalia opens first offshore licensing round

Storyline:Business, National News

Somalia is today its first-ever offshore licensing round following the delay in May occasioned by the COVID-19 outbreak in what paves the way for potential investors to bid for oil exploitation rights.

The Ministry of Petroleum announced in its website dedicated to the licensing rounds the bids will open today and run through March 2021.

The opening of the bids follows the appointment by the cabinet of the board and chairman of the Somali Petroleum Authority (SPA) which is mandated with regulating exploitation, revenue collection, and oil management practices in the country.

The SPA will be headed by Ibrahim Ali Hussein who until his appointment was a senior economic advisor in the Ministry of Petroleum since 2014.

The Federal Parliament passed the amended Petroleum Act in February and subsequently assented to by President Mohamed Farmaajo.

According to the Ministry, Somalia currently has completed the acquisition and processing of 40,000 2D long-offset seismic data from 2014. The Petroleum Ministry had earlier indicated it will be putting on offering the first seven blocks.

“The survey design, which covers water depths of 30 m to 4,000 m, has allowed for seismic coverage over the shelf, slope and basin floor with dip, strike and recording time intervals suitable for defining a range of leads and prospects,” the statement read in part.

The amended law provides for among others a revenue sharing formula between the Federal Government, Federal Member States and the oil-producing districts.