Somalia’s government signed an oil-production sharing agreement with US-based Coastline Exploration Ltd., the latest step toward developing the country’s energy industry.
Coastline, based in Houston, Texas, paid $7 million to the government for seven agreements and will now proceed with an exploration program, the government said in a statement on Friday.
Bloomberg reports that the deal was signed after a review of an accord signed in February that was deemed illegal by the Horn of Africa nation’s former government.
Somalia is one of the last major unexplored petroleum frontiers globally. In the past, it attracted the attention of international oil and gas majors – ExxonMobil, ConocoPhillips, BP, Shell, Chevron and ENI all of whom held large concession agreements in the country.
30 years of a tragic civil war has led to a protracted hiatus in petroleum exploration in Somalia since then.
The country’s offshore waters may contain at least 30 billion barrels of oil reserves, according to Spectrum Geo, a company that conducted a seismic study of Somalia’s offshore basins in 2014-2015.