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Friday, October 21, 2022
The Somali Petroleum Authority (SPA) has announced that seven Production Sharing Agreements between the Ministry of Petroleum and Mineral Resources of Somalia and Coastline Exploration have now been confirmed by the Federal Government of Somalia allowing for the commencement of a hydrocarbon exploration program.
The agreements were initially completed in February of this year. The deal represents a milestone for the Somalia oil and gas industry as after 62 years the country returns to offshore oil and gas exploration.
Coastline paid a $7 million signature bonus to the Somali Central Bank for its seven PSAs that cover offshore, deep-water blocks in Somalia, under the agreed commercial terms.
SPA believes that with the capabilities of Coastline, both technically and financially, there is the “exciting possibility of identifying proven hydrocarbon reservoirs in the near future. If Coastline is ultimately successful in finding and developing commercial oil and gas discoveries, the benefits to Somalia could be transformational, as such discoveries have been in other parts of the world,” a statement read.
Eng. Abdulkadir A. Mohamud, Chairman and CEO, SPA, commented: “The exploration and production of hydrocarbons in a responsible and safe manner will provide the vital resources we need to build communities and ensure the long-term sustainable development and prosperity of our country. At the SPA we strive to ensure the long-term development of all petroleum activities within Somalia through transparent and impactful regulation to benefit all stakeholders and contribute to Somalia being a wide-ranging investment destination.”
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