Somaliland is on the verge of joining the league of oil producing nations according to the country’s minister for energy and minerals.
Oil production, he says will turn around the economy of the globally unrecognized country and push its quest for recognition by other countries.
Drilling starts next year and Minister Jama Mohamoud Egal says there are positive signs the findings will be positive.
The country has 24 blocks, oil six of which have already been put under concession to three companies
Three blocks have been commissioned to Genel Energy, two to Rak Gas while one will be handled by Ansen Gas.
According to the minister, two of the three blocks have already completed seismic operations and are processing the data but he says it is very promising.
“I have all reasons to believe we are going to get positive results from the data analysis,” he said on October 20 while addressing students at the University of Hargeisa on the chances of the country striking oil.
“The drilling will determine whether we have enough oil for commercialization,” the minister added.
“Genel Energy has made giant steps. “ They are currently processing of the data which will facilitate seismic interpretation and the associated development of an inventory of drillable prospects,” the minister stated.
Genel has stated that initial results have offered sufficient encouragement for a number of high graded areas to be targeted with infill 2D seismic acquisition.
Among the blocks Genel has been working on is Odewayne whose potential estimates of 1 billion barrels has seen no seismic data acquired before this and remains undrilled although the scale of the basin and comparison with analogue basins suggests potential for developing a significant portfolio of potentially drillable structures.
The company has expressed great expectations that it will hit large and commercially viable oil quantities; their Somaliland venture shows even better prospects than their previous undertakings elsewhere.
In August 2012, Genel was awarded an exploration licence for onshore blocks SL-10-B and SL-13 in Somaliland, with a 75% working interest in both. The company extended its presence in November 2012 with the acquisition of 50% participating interest in the Odewayne Production Sharing Agreement which covers blocks SL-6, SL-7, SL-10A.
Onshore Somaliland unexplored
Onshore Somaliland is a relatively unexplored region, with few exploration wells drilled.
Genel took the opportunity because of encouraging indications including onshore oil seeps and existing geological data showing favourable conditions for hydrocarbons to have accumulated in numerous large tilted fault blocks and sub-basins.
Minister Egal said they are also in final stages of negotiations with three other companies that have expressed interest in exploring oil in the country.
“We may sign product sharing agreements soon,” he said.
Somaliland, a country of under 4 million people broke away from Somalia after the onset of the 1991 civil war but is yet to get international recognition. The country does not get support from international financial institutions but the discovery of oil may turn around the fortunes of the country whose population and economy largely depends on remittances.