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Somalia signs oil deal with Spectrum ASA amid Soma Oil quandary

Storyline:Business, National News

SOMALIA HAS today signed a seismic survey agreement with the UK based Multi-Client seismic survey company Spectrum ASA hot on the heels of the controversial Soma Oil agreement which has spiraled into a barrage of accusations culminating into criminal investigations in the UK.

The agreement gives Spectrum up to 28,000Kmof long offset 2D seismic data offshore south Somalia in order to image subsurface structures. The survey will focus on blocks owned by the Dutch oil explorer Royal Dutch Shell and is expected to generate extensive data which Somalia will use to prospect for oil drilling deals.

In-depth study

“The new acquisition is intended to complement 20,000 km of existing seismic that was acquired in 2014. These seismic surveys will allow the in-depth study of hydrocarbon prospectivity offshore Somalia, which lies in close proximity to major discoveries on the East African margin,” said the Ministry of Petroleum in a statement to the media.

“These seismic surveys will allow the in-depth study of hydrocarbon prospectivity offshore Somalia, which lies in close proximity to major discoveries on the East African margin.’ Petroleum Ministry

The Ministry said as part of the agreement, which has not been made public yet, Spectrum SA will use its global marketing reach to raise interest and awareness amongst the oil and gas industry.

Spectrum is a UK based company founded in 1986. Information on its website says the company provides Multi-Client seismic surveys and high quality Seismic Imaging services to the global oil and gas industry from offices in the USA, Norway, UK, Brazil, Australia, Indonesia and Singapore.

The company says it boasts one of the largest 2D library comprising of over 3.3 million km of high quality 2D seismic alongside more than 160,000 km2 of significant 3D coverage in key areas.

Economic development

Petroleum Minister Mohamed Mukhtar Ibrahim said the agreement would be instrumental in convincing oil companies to come back to Somalia. “This historic seismic data agreement will be the resumption of the exploration programme of the hydrocarbon reserves of our country, which will be a turning point for the economic development of our nation,” said Muktar.

Muktar singled out Royal Dutch Shell and Exon Mobil as key targets expected to make a comeback once the survey findings are over. These companies declared their oil blocks Force Majure in Somalia when the civil war broke out.

Monitoring Group

A leaked UN Monitoring report whose findings prompted investigations by the UK Serious Fraud Office on dealings between Somalia and Gas indicts the two parties for locking out other oil companies from bidding for surveys.

“We received unverified information that some pre-1991 license holders had offered to share geological data with the Federal Government of Somalia but withdrew these offers when the Soma Oil and Gas deal focusing on data acquisition was signed,” said the UN Monitoring Group for Somalia and Eritrea in the July report.

Soma Oil was, in the deal awarded 12 offshore oil and gas blocks totaling 60,000km2.

Muktar has however refuted any underhand dealings with Spectrum noting that the agreement was today signed in public with the approval of the Prime Minister and the Finance Minister both of were present during the signing.

Common interest

Muktar said the agreement is different from previous agreements noting that this will only focus on data collection and the government will make its own decision on choice of drilling companies.

Prime Minister Omar Abdirashid Sharmake said the agreement was in the common interest of the country and that the findings will give the government critical information for informed decision making. “Seismic data can lead to good decision-making and guided strategy,” said Sharmake.

The agreement comes barely a week after the semi-autonomous region of Puntland inked a similar deal with US incorporated seismic survey company ION Geophysical to ‘assist the PPMA in demarcating a block boundary scheme for future licensing activity.

The Puntland Petroleum Management Agency, PPMA established under Puntland Petroleum Law said the survey will deliver more than 7,600 km of pre-stack depth-migrated data to help explorers gain a better understanding of both the architecture of the sedimentary basins and the hydrocarbon potential of this margin.