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Civil strife has been one of Africa's biggest hurdles to the exploration and production of oil and gas on the continent's waters.
Despite a reduction in the conflicts, violence has flared up again in East Africa, as forces loyal to Somalia clashed with those from the semi-autonomous region of Jubaland hence stopping in its tracks the drive towards political stability in the region which could hold huge oil and gas reserves.
The clash between Somalia and Jubaland early at the weekend and early this week, which has spilled over into Kenya, comes at a time when both parties were expected to participate in the implementation of a more focused offshore development plan by international oil companies, some already with production sharing contracts in Somalia and other potential new upstream investors.
Telltale signs of the current conflict and its likely impact on Somalia's development agenda and plan to delve fully into its offshore oil and gas exploration program, emerged in August 2019 when regional elections were held in Jubaland province, with the outcome of the poll contested by rival political factions.
Although Sheikh Ahmed Madobe, leader of the Ras Kamboni militia and a close ally of neighboring Kenya, was declared the winner, the protests by the rival political faction that is closely allied to Federal government of Somalia had all the indications of a simmering serious conflict that is not only undermining Somalia's overall national development priorities, including commercialization of its potentially huge offshore oil and gas deposits, but could lead to more instability should the country's national elections slated for this year get canceled.
The place of Jubaland in East Africa and Horn of Africa's offshore oil and gas segment is critical.
The shoreline of this semi-autonomous State delineates the hotly contested maritime boundary between Kenya and Somalia, and which to a large extent derailed exploration plans. Although Jubaland has not staked a claim for the potential hydrocarbon-rich acreage from Somalia, there is a likelihood of the current conflict extending into the future, especially during negotiations on the sharing of the monetized offshore hydrocarbon resources.
Related: Shell/Exxon JV to Drill for Oil Off Somalia
Even before last week's clash between Somalia and Jubaland, delays in pushing forward Somalia's oil and gas sector have been attributed partly to the insecurity perpetrated by Al Qaeda-aligned Al-Shabaab militant group that is spread across several areas of the country including its territorial boundary in the Indian Ocean and even beyond.
Kenya, which has been accused of favoring Jubaland semi-autonomous government, is also embroiled in a maritime dispute with Somalia, adding to the growing list of maritime boundary disputes in Africa that have had a direct impact on the region's offshore oil and exploration and production. However, the new conflict within Somalia has not stopped the Somali government from striking a deal with a joint venture of international oil companies Shell and ExxonMobil.
Somalia's Petroleum and Minerals Resources Minister Abdirashid Mohamed Ahmed said earlier this week that the government has agreed to an initial roadmap with the Shell/Exxon JV that includes the exploration and development of offshore oil and gas reserves.
"I am delighted we have agreed an initial roadmap with the Shell/Exxon joint venture," he said. With the initial phases of the offshore oil and gas exploration and development plan agreed on, Somalia now has the confidence of its ability to firm up its shallow and deepwater exploration program, according to the minister.
The agreement between Somalia and the JV of Shell and Exxon follows the October 2019 signing into law the country's petroleum bill by President Mohammed Abdullahi Farmajo.
"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 was quoted saying in a media statement.
The law, like those in countries already producing oil and gas Africa, emphasizes revenue sharing and provides a framework for investment and job creation in Somalia. According to the minister Mohammed Ahmed, the "opportunities for the international exploration and development majors are enormous, with Somalia having the potential to become one of the most significant hydrocarbons plays in offshore East Africa."
But for Somalia to contribute to Eastern Africa's much-needed energy security, the country has to invest more in conflict resolution with both Jubaland and Kenya to enable progress in the planned offshore commercial exploitation of its hydrocarbons resources.
https://www.oedigital.com/news/476247-new-civil-conflict-in-somalia-could-hurt-offshore-projects
