Africa Business segment on last weeks Somalia Oil bidding

kickz

Engineer of Qandala
SIYAASI
VIP
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Cliff notes;

-Exxon Mobile/Norway/Turkey involved in bidding
-Government promised special Troops trained to defend Ocean oil refineries
-Why now? Current admin is pushing oil as a source of Revenue for government to stop relying on donor funds
 

Yahya

2020 GRANDMASTER
VIP
How many barrels will we sell in the first five years of drilling?

Since we are not apart of OPEC can we dictate how many barrels we sell?
 

kickz

Engineer of Qandala
SIYAASI
VIP
How many barrels will we sell in the first five years of drilling?

Since we are not apart of OPEC can we dictate how many barrels we sell?

15 blocks up for sale contains 30 Billion barrels according to here


Opec is probably already anticipating how much we will bring to market and adjusting based on that
 

Yahya

2020 GRANDMASTER
VIP
15 blocks up for sale contains 30 Billion barrels according to here


Opec is probably already anticipating how much we will bring to market and adjusting based on that
30billion is already trillion+ on the get go. Post 2025 aid will no longer be needed and I predict good things for them

Any region that doesn't cooperate will be left unable to drill or make deals. They will be left underdeveloped for a petty grudge.
 

AbdiGeedi

To keep your balance, you must keep moving.
We need to set up our own refineries to sell ready gasoline. For starters, we can provide our own market with different grades of gasoline, aviation fuel and diesel. It would be strange to export crude oil and than import fuel.
 

AbdiGeedi

To keep your balance, you must keep moving.
Somalia also needs to use ExxonMobil ties to lobby the US government against recognition of Biixi's regime.
 

kickz

Engineer of Qandala
SIYAASI
VIP
We need to set up our own refineries to sell ready gasoline. For starters, we can provide our own market with different grades of gasoline, aviation fuel and diesel. It would be strange to export crude oil and than import fuel.

That’s probably later, for now it looks like it will be shipped off as raw materials.
 

AbdiGeedi

To keep your balance, you must keep moving.
That’s probably later, for now it looks like it will be shipped off as raw materials.
Somalia will be missing on a lot of added value. Anyway, we need to vet contracts so that Somalia is not being taken undue advantage by foreign corporations.

I wonder if Norway's contributions to various projects and NGOs in Somalia have to do with its hopes of getting piece of the pie in our oil.

I have soft spot for Turkey, but business is business. Somalia should not get carried away but act in a mutually beneficial manner. One of our preconditions should be creation of the Somali Navy and deliverance of new frigates and rapid response boats by Turkey. Somalia needs to take control of its waters and protect its fishing rights and spur the fishing industry.

The US involvement will be instrumental for wider geopolitical purposes.

We should keep clear of China for it has proven to be a predatory lender.
 
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AbdiGeedi

To keep your balance, you must keep moving.
@kickz @Yahya @OTF

Somalia: The dawning of a new era of oil exploration

By David Whitehouse
6 August 2020

Somalia will in coming years become an oil producing country and build an industry that will create jobs and support economic growth, Ibrahim Ali Hussein, chairman and CEO of the newly created Somali Petroleum Authority, tells The Africa Report.

The country, which shares the geological structure of the Arabian peninsula, “undoubtedly has petroleum resources,” says Hussein. “We have to start exploration. We can’t afford to wait.”
Somalia’s first-ever licensing round for up to seven exploration blocks opened on 4 August and runs until 12 March 2021. Hussein will issue a production terms contract in coming days, which he says will offer “very attractive” incentives in terms of taxation and royalties for oil companies. Production will still be profitable at $40 per barrel, he says.

Oil exploration budgets globally are under scrutiny after the rough ride for prices prompted by the pandemic. Somalia’s resources are promising enough to make the cut, adds Hussein. “COVID-19 will not last for ever,” he says. “Oil companies will be budgeting for Somali exploration.”

  • The round is being conducted virtually due to COVID-19.
  • The number of blocks on offer has been reduced to a maximum of seven from an initial 15 to allow for better management of exploration, Hussein said.
  • According to subsurface data company TGS, the original 15 blocks have resource potential of 30 billion barrels of oil.
Hussein, previously an economic adviser to country’s ministry of petroleum, will lead the authority for a four-year term, which can be renewed.

He predicts that in a smooth scenario, offshore oil discoveries will start in about six or seven years. He’s confident that the regulator will be able to remain independent. “The politics of the country won’t affect the institution.”

Port Upgrades

Somalia remained off the radar for oil exploration companies for 25 years after the collapse of the government in 1991. Existing geological and geophysical data were mostly lost or destroyed.
  • The regulator says that the licensing round is supported by 20,185 km seismic data, complementing 20,500 km of existing seismic data acquired in 2014.
  • A revenue sharing agreement dividing oil income between the federal government and Somalia’s six constituent member states has already been tested using rental payments received from Shell and ExxonMobil.
  • Note though that Somaliland, which declared independence from Somalia in 1991 but has never been recognised as a country, did not take part in the discussions leading to the ratification of Somalia’s petroleum legislation.

Many of the experts needed to staff the regulator were already working within the ministry of petroleum, explains Hussein. He also expects to be able to call on the talents of Somali’s diaspora. Geologists and engineers in the diaspora have shown that they are willing to come and contribute. “We need to enhance capacity.”

The country, has “limitations” in terms of the air and sea ports that oil companies will need to use, notes Hussein. New ports will be developed and existing ones upgraded, he says. Security remains a problem: in July a suicide car bomber drove into a checkpoint just outside the port of Mogadishu.

Somali will hire private security firms as well as using the army to ensure the exploration safety. Hussein is “very confident” that piracy in the region’s waters won’t be an issue. “Piracy is history,” he says. “It’s over. Offshore Somalia is secure.”

Bottom Line

Early establishment of the regulator ahead of discovery will strengthen Somalia’s chances of developing a viable oil industry.

 

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