Somalia: Government Validates Controversial Oil Exploration Contracts

The Somali government has approved seven offshore oil exploration contracts with the American company Coastline Exploration.

Share:

Gain full professional access to energynews.pro from 4.90€/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90€/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 €/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99€/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 €/year from the second year.

The Somali government has validated seven offshore oil exploration contracts with the American company Coastline Exploration, sources of controversy with the previous administration of this country in the Horn of Africa, it was learned Saturday.

“We want to drill several exploration wells and in six to seven years, we could see oil revenues flowing into Somalia,” Coastline Exploration boasted in a tweet Saturday.

The U.S. company and the government of President Hassan Sheikh Mohamoud, elected in May, formalized on Friday the conclusion of seven production sharing agreements (PSAs) for oil blocks located in deep waters off the Somali coast.

These agreements were initially concluded in February, but shortly after the announcement of their signing by the oil minister, then-President Mohamed Abdullahi Mohamed, known as Farmajo, and his Prime Minister Mohamed Hussein Roble denounced them, in a rare unanimity between the two men.

The president’s office had declared them “null and void,” saying they violated a decree prohibiting the signing of any agreement with a foreign entity during the election period. Mr. Roble had considered this signature “illegal and unacceptable”.

The current government has indicated that five changes have been made to the original agreements.

“The Attorney General and international lawyers suggested that certain provisions of the agreement be amended in accordance with Somali law and we have done so,” Somali Oil Minister Abdirizak Omar Mohamed said in a statement.

“The Somali people are facing a terrible economic situation that makes us ask for international assistance every year. To solve this problem, we must exploit our resources, develop our economy and improve the income of the government and the people,” President Hassan Chaikh Mohamoud said in a statement.

One of the poorest countries in the world, Somalia has been plagued by decades of instability, including the 2007 insurgency by radical Islamists, the Shebab.

Houston (USA) based company specializing in hydrocarbons in East Africa, Coastline said in a statement that it has paid “a signing bonus of 7 million dollars”. “Coastline estimates that approximately 100,000 barrels of oil will flow from each of the discovered fields each day,” she said.

“If our wells come to fruition, the Federal Government of Somalia will receive a 5% royalty, 50% profit sharing and will apply an income tax on onshore exploration at the rate of 30%. The government also has the right to take a direct interest in each discovery if it wishes,” the company detailed on Twitter.

QatarEnergy obtained a 35% stake in the Nzombo block, located in deep waters off Congo, under a production sharing contract signed with the Congolese government.
Phillips 66 acquires Cenovus Energy’s remaining 50% in WRB Refining, strengthening its US market position with two major sites totalling 495,000 barrels per day.
Nigeria’s two main oil unions have halted loadings at the Dangote refinery, contesting the rollout of a private logistics fleet that could reshape the sector’s balance.
Reconnaissance Energy Africa Ltd. enters Gabonese offshore with a strategic contract on the Ngulu block, expanding its portfolio with immediate production potential and long-term development opportunities.
BW Energy has finalised a $365mn financing for the conversion of the Maromba FPSO offshore Brazil and signed a short-term lease for a drilling rig with Minsheng Financial Leasing.
Vantage Drilling has finalised a major commercial agreement for the deployment of the Platinum Explorer, with a 260-day offshore mission starting in Q1 2026.
Permex Petroleum has signed a non-binding memorandum of understanding with Chisos Ltd. for potential funding of up to $25mn to develop its oil assets in the Permian Basin.
OPEC+ begins a new phase of gradual production increases, starting to lift 1.65 million barrels/day of voluntary cuts after the early conclusion of a 2.2 million barrels/day phaseout.
Imperial Petroleum expanded its fleet to 19 vessels in the second quarter of 2025, while reporting a decline in revenue due to lower rates in the maritime oil market.
Eight OPEC+ members will meet to adjust their quotas as forecasts point to a global surplus of 3 million barrels per day by year-end.
Greek shipping companies are gradually withdrawing from transporting Russian crude as the European Union tightens compliance conditions on price caps.
A key station on the Stalnoy Kon pipeline, essential for transporting petroleum products between Belarus and Russia, was targeted in a drone strike carried out by Ukrainian forces in Bryansk Oblast.
SOMO is negotiating with ExxonMobil to secure storage and refining access in Singapore, aiming to strengthen Iraq’s position in expanding Asian markets.
The European Union’s new import standard forces the United Kingdom to make major adjustments to its oil and gas exports, impacting competitiveness and trade flows between the two markets.
The United Kingdom is set to replace the Energy Profits Levy with a new fiscal mechanism, caught between fairness and simplicity, as the British Continental Shelf continues to decline.
The Italian government is demanding assurances on fuel supply security before approving the sale of Italiana Petroli to Azerbaijan's state-owned energy group SOCAR, as negotiations continue.
The Dangote complex has halted its main gasoline unit for an estimated two to three months, disrupting its initial exports to the United States.
Rosneft Germany announces the resumption of oil deliveries to the PCK refinery, following repairs to the Druzhba pipeline hit by a drone strike in Russia that disrupted Kazakh supply.
CNOOC has launched production at the Wenchang 16-2 field in the South China Sea, supported by 15 development wells and targeting a plateau of 11,200 barrels of oil equivalent per day by 2027.
Viridien and TGS have started a new 3D multi-client seismic survey in Brazil’s Barreirinhas Basin, an offshore zone still unexplored but viewed as strategic for oil exploration.

Log in to read this article

You'll also have access to a selection of our best content.