Somali oil and gas potential faces institutional gaps
Thursday, March 28, 2019
Subject
Somalia's oil ambitions.
Significance
In February, the Federal Government of Somalia (FGS) launched a licensing round for 15 offshore energy blocks at a conference in London. Somalia’s oil potential is significant -- some estimates suggest around 100 billion barrels of oil waiting to be discovered -- but serious institutional hurdles stand in the way.
Impacts
- Trust between the FGS and regional administrations will erode further if the FGS continues unilaterally to market energy blocks.
- Signs that security may be worsening rather than improving may curb investor curiosity.
- Kenya’s recent steps to revamp the regulatory environment and formalise revenue-sharing make it a more attractive investment prospect.
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