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Will Somalia's Above-Ground Risks Blunt Its E&P Licensing Prospects?

Aug. 01, 2022 11:00 AM ETSHEL, XOM4 Comments
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  • In light of limited exploration success to date, the acute governance, security, and infrastructure risks evident in Somalia may prove to be challenging hurdles for exploration and production development.
  • Although Somalia has made progress on developing its legal and institutional hydrocarbon sector framework, there are still major challenges for foreign investors, and most immediately for the ongoing bid round.
  • Somalia's insecurity, political instability, and competing federal and regional interests mean that the country will likely face challenges in attracting investors with the necessary competence and capacity to explore and develop the deepwater acreage on offer.

Flag of Somalia

Derek Brumby/iStock via Getty Images

Amid higher global oil prices and a sharpening focus on new oil and gas supply sources to offset dependence on Russia, East African frontier Somalia has a renewed opportunity to attract foreign investors to its upstream

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Comments (4)

cenc profile picture
XOM should just buy Somalia. I am pretty sure 99% of the population would happily take a check and some stability in exchange for their natural resources.
TheOldHand profile picture
@cenc The sad truth is that Somalia is not worth buying. Nor are it's potential hydrocarbons as long as XOM keeps making Guyana finds.
I can’t imagine any oil company investing in this country, especially without any indication of potential success of discovering recoverable reserves.
SouthEastAsia profile picture
@scuzeone So true, the idea is unfathomable. Take a trip to Minneapolis before committing to any insane investment in that country.
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