CAPE TOWN, Feb 8 (Reuters) - Somali President Mohamed
Abdullahi Farmajo has signed landmark petroleum legislation into
law to help open up a new frontier market, the oil ministry said
on Saturday.
The upper house of Somalia’s parliament in January approved
the petroleum law aimed at providing a regulatory framework that
will help attract investment in exploration by major oil
companies.
"The Petroleum Law demonstrates the capacity of the Somalian
people to unite in an historic effort to work together to build
an equitable, prosperous and peaceful nation," Farmajo said in a
statement.
The new law establishes revenue-sharing between the central
government and states as well as a legal framework for an
industry the country hopes will bring jobs and investment after
decades of conflict.
Plagued by civil strife, Somalia currently does not produce
any oil but production could transform the economy as seismic
data has shown there could be significant oil reserves offshore.
The government hopes the petroleum law will entice big oil
companies like ExxonMobil and Shell to return
to the country where they held legacy blocks from the 1990s.
Last October, the two companies paid $1.7 million owed to
Somalia for leasing these offshore blocks, although operations
there remain suspended.
"The opportunities for the international exploration and
development majors are enormous, with Somalia having the
potential to become one of the most significant hydrocarbon
plays in offshore East Africa," Abdirashid Mohamed Ahmed, the
Minister of Petroleum and Mineral Resources, said in the
statement.
(Reporting by Wendell Roelf; Editing by Christina Fincher)
