CAPE TOWN, Jan 6 (Reuters) - The upper house of Somalia's
parliament on Monday approved a new petroleum law, which aims to
provide a regulatory framework that will help to attract
investment in exploration by major oil companies.
The country 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 new law will establish revenue sharing between the
central government and states and will provide a legal framework
for an industry the country hopes will bring jobs after decades
of conflict.
"This is a major step forward for Somalia and its people as
the petroleum law is approved by the upper house and moves
closer to completing its legislative process," Abdirashid
Mohamed Ahmed, the minister of petroleum and mineral resources,
said in a statement on Monday.
The legislation still needs to be signed by the president
before it can come into effect.
In November, Ahmed told Reuters Somalia, which has been
marred by violence since clan warlords overthrew a dictator in
1991, was planning to announce its first ever oil and gas
licensing round off the country's coastline in December.
Government hopes the petroleum law will help to 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.
(Reporting by Wendell Roelf. Editing by Jane Merriman)
