Somalia is opening its first bid rounds this August with the plan to auction seven oil blocks, the Ministry of Petroleum has said.
A statement from the Petroleum Ministry Tuesday noted the bids which will be done on virtual space owing to COVID-19 restrictions will involve the sale of seven blocks located in central and southern parts of the country.
“The 2020 Somali licensing round features up to 7 blocks that are up for the bidding process which are estimated to be among the most prospective areas for hydrocarbon explorations and production in Somalia,” the Ministry said in a statement.
“This licensing round will open on 4th of August this year and will be closing on 12th March 2021.”
Deputy Petroleum Minister Mohamud Abdikadir Hila’a said the blocks on sale are located in HirShabelle (152, 153) (164, 165), South West (177, 178) and Jubbaland (204)
Hila’a said the licensing round is expected to attract 130 investors. Exxon and Shell have struck a deal with the Federal Government to convert its former concessions into a Production Sharing Agreement contained in the amended Petroleum Law.
The two oil majors which presented a joint venture paid accruing surface rentals amounting to $.17 million in February.
A Revenue Sharing Agreement contained in the Petroleum Law provides for a 55% revenue share for the Federal Government and 45% for Federal Member States in the case of offshore drilling.
The Law envisages the establishment of Somali Petroleum Authority which will be responsible for licensing, monitoring and enforcement of the petroleum rules and regulations. Another entity is the Somali National Oil Company (SONOC) which shall be a joint venture between the Federal and State governments.