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Monday, June 23, 2014
The Minister of Petroleum and Mineral Resources of Somalia, Daud Mohamed Omar met with the head of Shell at The Hague on June 13. The minister was in The Hague at the invitation of Shell EP Somalia B.V. who was awarded a concession for five blocks (Blocks M3-M7) offshore Somalia in 1988. Mobil Exploration Somalia Inc. (ExxonMobil) subsequently joined the concession as a 50% JV partner.
Both Shell and ExxonMobil have begun discussions with the ministry to convert the existing concession, which has been under force majeure since 1990, into a Production Sharing Agreement PSA as called for by the country’s 2008 Petroleum Law.
According to a released jointly by the government and Shell, Somalia welcomes these initial engagements with Shell and ExxonMobil. The JV partners will continue discussions on areas of cooperation and the potential for exploring and developing hydrocarbon resources offshore Somalia. It is the parties’ hope that these discussions will help pave the way towards the long-term development of a sustainable oil and gas industry for Somalia, a key building block in the rebuilding of its economy.
Minister Daud Mohamed Omar said: “We are encouraged by the work that Shell and ExxonMobil are doing, and are keen to discuss the way forward on their offshore blocks. It is our hope that the joint venture will soon be able to start exploration and development activities in the country, and we believe these discussions are the first step in this process. I would hope to welcome Shell and ExxonMobil to visit Mogadishu in the near future.”
Shell VP of Exploration for sub-Saharan Africa, Alastair Milne said: “I am pleased that the Federal Government of Somalia clearly recognizes the rights of existing concession holders such as Shell and ExxonMobil, and I am delighted that progress is being made in relation to our acreage.”
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