Somaliland: Somali’s ‘Other’ Country

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Somaliland enjoys a certain amount of strategic advantage. It has a long coastline and deep sea ports, and could eventually serve as a major energy hub for East Africa. Foreign oil companies are already on to this and exploration is beginning in earnest.

Chevron was drilling in Somaliland in the late 1980s, and Conoco was laying airstrips, but these licenses were granted by the Somali government, which was taken over by militias in 1991 – a development that saw Somaliland declare independence that same year. So now we’re starting from scratch. There is the little matter that Somaliland is not an internationally recognized country, but foreign investors do not seem to be bothered by this technical inconvenience.

So far, three independent oil companies have signed up for exploration. The most notable is Turkey’s Genel Energy, which has taken the sector by storm in Northern Iraq. Genel will begin surveying in March and expects to drill its first well in early 2014. Somaliland officials are hoping Genel will have the same success it has had in Iraqi Kurdistan. UK-listed Ophir Energy and Australia-listed Jacka Resources are also in the first exploration. Together, the three companies have seven blocks. Genel owns 75% of two blocks,  Ophir also owns 75% of two blocks. There are a total of 24 blocks up for grabs and they cover one-third of the country’s territory.

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