- After decades of war, Somalia has been undergoing a peace and reconciliation process of late, with the internationally recognized transitional government preparing for presidential and parliamentary elections in August. A solution to a territorial dispute between the Somaliland region, which declared its independence from Somalia in 1991, and its neighboring semi-autonomous Puntland region, could pave the way for resumption of oil exploration activities.
Oil companies that were awarded concessions by the last government of Somalia, including Shell, ConocoPhillips, BP, Eni and Chevron, ceased their operations a decade ago after declaring force majeure due to unrest in the country. While Mogadishu says it still recognizes permits awarded prior 1991, it is not clear if concessions acquired post-1991 are considered valid, which include licenses granted to companies such as Africa Oil, Petrosoma and Jacka Resources.
Africa Oil previously drilled its Shabeel-1 well in the northern Dharoor block and said the well encountered several oil and gas shows indicating the presence of a working petroleum system.