Coastline Exploration, an upstream oil and gas exploration and production company, will move ahead with its exploration program in Somalia following the firm reaching an agreement with the government on seven production sharing contracts.
The agreements were signed after the government made five amendments to the proposals filed by Coastline Exploration in February, 2022.
The development will pave way for the upstream firm to make a $7 million payment to the Somali Central Bank as a signature bonus and thereafter conduct exploration activities in offshore deep-water blocks in which the U.S-based energy firm anticipates to produce 100,000 barrels of oil a day if discoveries are made.
"This agreement highlights that Somalia is open for business and international investment after the conflict that has blighted the country for so many years," H.E Hassan Sheikh Mohamud, President of Somalia, said.
With Coastline Exploration investing $50 million in Somalia's energy sector since 2018, H.E Mohamud, added that "Coastline clearly sees significant opportunity in Somalia and we share its vision. The Federal Government will do all it can to support this project and we want the first exploration well to start as soon as possible. Today marks a major step forward for Somalia as we look to develop our energy industry which should deliver material benefits for all Somalis. Energy independence, new tax revenues and further foreign investment in Somalia now beckons."
W. Richard Anderson, Chief Executive of Coastline Exploration, added that the company's operations in Somalia will be a game changer for the economy with revenues set to be generated providing an opportunity to unlock growth across the education, infrastructure, healthcare and other vital sectors critical to driving economic expansion and improving the standard of living for Somalians.
H.E Abdirizak Mohamed, the Minister of Petroleum and Mineral Resources, Somalia, reiterated that "Having seen how transformational new domestic energy sources have been for other countries in Africa, we are very excited by the potential of these offshore oil fields. Today's announcement really kick starts the energy industry in Somalia and is a turning point for the development of what is a critical revenue-generating area for the country."
