The Ministry of Petroleum and Mineral Resources of Somalia has agreed on an initial roadmap with the Shell/ExxonMobil joint venture focused on the next steps towards the exploration and development of certain offshore hydrocarbon blocks.
This co-created roadmap will enable the conversion of prior agreed concessions into Production Sharing Agreements (PSAs) under the provisions of the Petroleum Law, the ministry said in a statement on Monday.
This builds on the agreement signed in Amsterdam on June 21, 2019, which led to the receipt of $1.7 million from the Shell/ExxonMobil joint venture from historical surface rentals and other incurred obligations on offshore blocks.
In adherence to the revenue sharing agreement, this payment was re-distributed among Somalia’s Member States for independent allocation. The processing and distribution of this sum among the member states demonstrate the strength of Somalia’s revenue-sharing agreement and provides a model for future treatment of funds arising from petroleum exploration and production, the ministry said.
The Ministry said it was committed to creating an attractive fiscal and regulatory environment for independent and international oil companies to enter offshore Somalia.
Commenting on the initial roadmap, Abdirashid Mohamed Ahmed , the Minister of Petroleum & Mineral Resources, said: “I am delighted we have agreed on an initial roadmap with the Shell/Exxon joint venture. This gives us confidence in our ability to explore any offshore hydrocarbon potential further. We have a long relationship with the Shell/Exxon joint venture and look forward to this continuing as we seek to provide the building blocks we need to grow our economy.”