The commencement of oil exploration activities in Somalia: - The note of the day The signing of the deal between the Federal Government and Soma Oil and Gas is is a great step forward in restarting, developing and exploiting the oil and gas resources of the country. The agreement is about implementing seismic surveys of the Indian Ocean Floor of Somalia. This activity is a pre-requisite for oil and gas exploration. It will also help the international bid rounds on the prospective blocks of Somalia. There are two major reasons for starting exploration on the Indian Ocean floor: The first is security. It is relatively more secure to work on offshore than working on the onshore. The only problem that exploration activities may face is piracy, which is dwindling and fading away currently. Secondly, the offshore seems to be more prospective than the onshore, based on the information held at present. Though a major disadvantage on offshore exploration is related to expenses (very high), but the majors are able to meet the high costs. The "Majors" are the huge international oil companies such as Conoco-Phillips, ExxonMobil, Chevron, BP, PetroChina, Shell, ENI, Total, Petrobras and Gazprom. In terms of prospectivity, the Indian Ocean is a hotspot nowadays. Somalia is the last oil and gas frontier since East Africa and its Indian Ocean coast has proven to be a huge emerging frontier. There were huge discoveries in Mozambique, Tanzania and Kenyan offshore and onshore in Kenya and Uganda. The likelihood that Somalia has giant gas fields below the Indian Ocean is what what remains to be discovered, though there is an enormous belief by the oil and gas industry. Hopefully, within 7 to 10 years at the earliest, Somalia will join the ranks of the oil and gas producers.
Posted on: Wed, 07 Aug 2013 12:09:20 +0000
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