Discussions between Somalia and Turkey have been progressing smoothly since the signing of a cooperative and economic agreement between the two countries in February 2024 in Ankara, concerning the continuation of oil and gas exploration efforts along the Somali coastline, particularly in the southern regions of the country. The Turkish vessel Reis Arouj has completed 50% of its seismic survey operations in Somali waters, having commenced its tasks in October 2024 after docking at Mogadishu Port, with its crew receiving an official welcome attended by ministers from both nations.
Somali President Hassan Sheikh Mahmoud stated, “We have a new opportunity. Opportunities do not come by themselves; they are created and evaluated.” This comes amidst interest from American and British companies in developing oil and gas projects in Somalia, with Richard Anderson, CEO of American Coastline Exploration, affirming that “there are tens of billions of extractable barrels of oil.” Other foreign companies estimate Somalia’s oil reserves at about 110 billion barrels, surpassing Kuwait’s confirmed reserves, estimated at around 100 billion barrels. This positions Somalia’s future, should exploration and extraction projects succeed, among oil-producing nations and introduces new dynamics in global and Arab energy markets.
Oil and Gas in Somalia: A Historical Overview
Historically, oil exploration projects in Somalia, both onshore and offshore, date back to the 1940s during the European colonial period (British and Italian). Exploration began in 1948 when Sintecher Oil, Conoco, and the current Italian company Eni discovered eight oil basins, including: Daban, Migioritinia, Mudug, Mogadishu, Aylwaq Mandera, Ogaden region, Kismayo, and the Lamu Basin, with column heights ranging from five to six kilometers in various areas, dating from the Jurassic to Triassic periods (millions of years ago). The British were the first to gather data and publish research on the mineral wealth of the Horn of Africa during colonial rule, while the Italians endeavored to keep up with the British, resulting in significant early conclusions about the nature of investment possible in Somalia.
Between 1950 and 1990, Somalia encouraged foreign investment in oil exploration, with global oil companies like Exxon Mobil, ConocoPhillips, BP, Shell, Chevron, and Eni receiving major exploration concessions from the centralized state. However, with the countdown to General Mohamed Siad Barre’s military regime (1969-1991), foreign companies’ hopes for starting exploration waned amid the declaration of “force majeure” following the outbreak of civil war in 1991. Conoco’s exceptional role in facilitating American landings in 1993 marked a significant moment in understanding international companies’ operations in Somalia; yet, the widening civil war due to failed American intervention stifled oil exploration and extraction projects from foreign, particularly American and British, companies.
Nearly two decades later, the story of oil in Somalia resurfaces with renewed hope, particularly after 2012, with subsequent international conferences discussing the future of oil in Somalia. A London conference held in 2012 aimed to shape the Somali crisis and the competition between foreign companies for oil exploration projects in Somalia. The primary focus of Western interest in Somalia revolves around capitalizing on its vast mineral and oil wealth, rich in iron (approximately 200 million tons with an average content of about 35%), as well as tin, copper, and salt. Agriculture constitutes one of Somalia’s largest economic sectors, with about eight million hectares suitable for cultivation, alongside a significant livestock wealth representing about 40% of national production.
Foreign Competition in Somali Oil Exploration
The competition among Western and Asian companies for control over oil and gas in the Somali Peninsula has intensified since the 1950s, marked by a fluctuating landscape of geological exploration due to political and security instability. This competition passed through various phases, from the mandate period to the military regime in Somalia, culminating in the fall of the centralized state in 1991. Notable attempts for oil and gas exploration were undertaken by researchers such as Azzaroli and Merla, who created geological maps of the Somali Peninsula, leading to the establishment of Sinclair Somali Corporation, which began drilling operations for several exploratory wells. Gulf Corporation also began work, with promising reports of large oil reserves unfolding.
With the onset of the 1980s, American and Italian companies turned their attention to Somalia, notably Chevron, which signed a partnership with the Somali state for oil exploration in the Nogal Basin, believed to contain substantial oil reserves. However, the outbreak of civil war in 1991 halted all major oil companies’ exploration activities, declaring force majeure. This situation persisted until August 7, 2008, when the Somali transitional parliament approved an oil law signed by the late President Abdullah Yusuf Ahmed (2004-2008), establishing the Ministry of Oil and Mineral Resources as the custodian of Somalia’s oil resources, governing all oil operations and contracts under a production-sharing agreement framework. This coincided with a severe oil crisis faced by Ali Mohamed Gedi’s government following an agreement between Puntland and Africa Oil Corp, which secured blocks in the semi-autonomous Puntland region, notably the Darawira Valley and another exploration area in Nogal Valley, covering 3,616,800 hectares within the federal state. However, this project faced repeated disputes among clans, making progress impossible amid a political crisis between Puntland’s government and the current federal government.
Following the end of the transitional governments in Somalia (2004-2012), the administration of President Hassan Sheikh Mahmoud (2012-2017) formulated a legal framework for signing exploration and production agreements with international oil companies, including revenue-sharing agreements that define the distribution of oil revenues between the federal Somali government and the five federal member states, alongside the Benadir region, which lacks a special status and remains a contentious issue amid federal challenges.
In 2013, the federal government signed an agreement with Coastline Exploration (formerly Soma Oil & Gas) to explore offshore oil in the economic maritime zone, particularly off the shores of Galmudug, Hirshabelle, South West, and Jubbaland. The agreement stipulated a limited exploration period, followed by agreements on extending the contract, under which the company would have the right to extract oil from 12 areas it would select, provided it met the conditions set by the government.
By 2015, British company Spectrum acquired approximately 20,000 kilometers of long-offset two-dimensional seismic data off the coast of Somalia, with global oil companies entering the competitive fray, engaging in agreements and contracts with federal states not directly subject to the federal government. The signing of a deal by Genel Energy with the Hargeisa government in 2018 sparked outrage from the federal government for acquiring blocks potentially containing 5 billion barrels of oil. Genel Energy had obtained an exploration license for two land blocks, “SL 10 B” and “SL 13,” in unrecognized Somaliland in August 2012, stating that its project was in the pre-production stage across two fields in that area.
Additionally, on March 7, 2024, Somali Minister of Oil Abdirazak Mohamed Omar signed an agreement with his Turkish counterpart, Alparslan Bayraktar, in Ankara, concerning the exploration and development of oil and natural gas off the Somali coast—shortly after a defense and economic cooperation agreement was signed between Turkey and Somalia on February 8, 2024, wherein Turkey pledged to protect Somali waters in exchange for a share of marine resources. The federal government also signed an agreement with American Liberty Petroleum on March 11, 2024, for oil exploration in three deep-water areas of the maritime economic zone. This raised questions regarding the collaborative roles of Turkey and the United States in dominating oil exploration and extraction projects in Somalia.
Notably, oil and gas exploration projects in Somalia are fraught with complexities that provoke internal and external crises. The enduring challenges hampering these future projects stem from the absence of strong governments, rampant corruption, a lack of competencies and expertise, and the absence of infrastructure to manage these massive undertakings. This situation raises concerns among many officials and former politicians that these promising projects could transform into a curse, deepening schisms and crises in Somalia while also generating fears of failure in ongoing efforts by Turkey and the federal government to exploit this immense, untapped oil wealth.
Will Turkish Company TPAO Succeed in Oil Exploration?
Joining the list of foreign companies competing for oil and gas exploration blocks in Somalia is a Turkish government firm. Turkish Minister of Energy and Natural Resources Alparslan Bayraktar announced a new agreement between Turkey’s TPAO and Somali Petroleum Authority on October 25, during the reception of the Turkish vessel Reis Arouj, under which TPAO will commence oil exploration in three blocks off the coast of Somalia.
The extraction of crude oil appears closer than ever following marathon exploratory operations that have lasted approximately 65 years, beginning with the search for oil and natural gas in Somalia during the 1950s, prior to its independence in 1960. From then until 1990, exploration in Somalia occurred at about 70 terrestrial sites and four maritime sites, utilizing major global oil and gas companies like Shell, Chevron, Exxon Mobil, and Eni. Given the status of these companies in the global oil and gas sector, Somalia holds a distinctive position in traditional energy exploration.
As Turkey increases its interest in Somalia’s oil sector, there is significant optimism among Somalis that actual oil extraction may commence for the first time in early to mid-2025, following the docking of the first Turkish oil exploration vessel in Mogadishu in October, which will initiate 3D seismic surveys across 13 land and maritime sites in southern and central Somalia. Ankara’s involvement in Somalia’s energy sector represents a strategic partnership that aligns with broader geopolitical aspirations across Africa, with initial estimates suggesting potential investments of around half a billion dollars. Developing these vast oil resources in Somalia will require substantial financial investments, with drilling set to begin in designated maritime blocks next year in 2025.
An urgent question arises: Can TPAO succeed where Western companies have failed in oil exploration projects in Somalia, knowing that TPAO has licenses for exploration in a maritime area segmented into three regions covering an estimated 15,000 square kilometers?
Turkey will share in the revenues from oil and gas extraction in Somali territorial waters in return for the defense it provides, receiving 30% of the extraction revenues contributed by Turkey. The agreement also grants Turkey preferential access to the special economic zone. The 3D seismic study led by the Turkish vessel Reis Arouj is expected to last roughly seven months. Two of the three blocks in which Turkey has obtained exploration rights are situated about 50 kilometers offshore, while the third lies approximately 100 kilometers out, with estimates that oil exploration in Somalia will take between three and five years.
Oil and Gas Extraction in Somalia: Available Potentials and Possible Implications
Based on data, estimates, and technical studies, Somalia’s oil reserves have been estimated at over 30 billion equivalent barrels of oil, nearly three times Algeria’s oil reserves, placing Somalia third in Africa behind Libya and Nigeria. Thus, the vast oil resources (technical and geological potentials) in Somalia are attracting interest from major global companies and foreign nations recently.
There are promising opportunities currently available to expedite the exploration and extraction process within a few years, which can be summarized as follows:
- The presence of laws and a dedicated petroleum authority to regulate the agreements and operations of foreign companies, alongside monitoring their activities, will contribute to oil exploration efforts. This entity is authorized to facilitate partnerships and agreements with major global companies interested in exploration, thereby allowing those companies direct negotiation opportunities with the federal government in Mogadishu. Recently, the Somali Petroleum Authority prepared stimulating laws and regulations to encourage foreign investment in its oil and mineral sectors, in addition to a Somali oil law for wealth sharing and financial returns between the states and the central government, potentially mitigating legal obstacles facing Somalia and foreign exploration companies.
- International interest in Somali oil: Many countries, including Turkey, Britain, Norway, the United States, Italy, and Qatar, seek to enter oil partnerships with Somalia, with most of these countries’ companies actively working to ensure successful exploration and extraction projects to achieve additional financial returns that support their economies, advancing oil extraction efforts projected for Somalia in the coming few years.
However, despite the available potentials and hopes for success in starting exploration and drilling the first well by 2025, significant challenges hinder local aspirations aimed at alleviating the suffering of local populations eager to benefit from the nation’s oil, gas, and mineral wealth. These challenges include:
- Fragile Security Situation: Security in Somalia remains a concern that haunts all local and foreign investments. Decades of instability make implementing major commercial projects challenging, prompting local investments to flee abroad while continued efforts to attract foreign investment are hampered by the security challenge—the primary and most daunting obstacle for foreign investment projects. Oil and gas exploration projects in Somalia will inevitably clash with the brittle security situation, particularly in the southern and central regions, where oil potential is significant; some of these regions remain under the control of Al-Shabaab, which undermines the feasibility of economic projects for local traders and foreign companies alike.
- Lack of Political Stability: Although a federal government holds central authority in Mogadishu with international legitimacy, the political disputes between it and federal member states exacerbate the country’s political crises and slow down economic growth, posing a barrier to foreign investment. This is particularly evident given the lack of effective federal authority in Puntland, Jubaland, and the separatist Somaliland region, which will determine the operational scope for foreign companies interested in Somalia’s oil and gas sector, unless new favorable political conditions emerge that allow for the influx of foreign investment into key economic sectors, alongside necessary out-of-the-box thinking from political partners, prioritizing public interest.
- Environmental Impact and Clan Conflicts: Residents in some areas where oil exploration is occurring, notably in Galmudug region, express concerns about the dredging and drilling practices in the identified land blocks around the coastal city of Hobyo; facing opposition from these communities, federal and state-level efforts are underway to convince clans and address potential environmental consequences of oil and gas drilling. There are fears of possible clan rebellions to obstruct these projects, potentially leading to their cancellation, as witnessed in Puntland, where a clan attacked an exploration site in 2005, halting the project. It is also noteworthy that in April 2007, around 200 armed members of the now-dissolved Ogaden National Liberation Front attacked an oil field where Chinese experts were working, resulting in the deaths of 74 people and the kidnapping of seven Chinese workers. Thus, the absence of a secure and conducive environment for exploration projects complicates companies’ tasks and hinders their future efforts.
- Lack of Expertise and Infrastructure: The lack of specialized expertise in oil and gas represents another obstacle for the management, exploration, and future oversight of operations in Somalia. Additionally, the absence of necessary infrastructure for operational processes, especially following the collapse of Somalia’s only oil refinery located south of Mogadishu, the “Island Oil Refinery,” which had a production capacity of about 10,000 barrels a day and refined Iraqi oil, led by the Iraq-Soma company formed through a partnership between Somalia and Iraq, necessitating that oil production companies in Somalia transport barrels for refining and distribution abroad.
- Impact of External Intervention: Somalia remains subject to international and regional policies; external intervention is a negative factor exacerbating the situation in the country, where state reliance on public sector payroll support through foreign aid stands at an estimated 60%, reinforcing the notion of external intervention’s deepening role in politics, security, and large-scale economic projects like oil and gas. These projects may be conducted behind the scenes, influenced by major global states and companies.
Conclusion
The oil and gas exploration project in Somalia, especially following the arrival of the Reis Arouj vessel at Mogadishu port, has stirred winds of hope and prosperity among Somalis, yet it has also sown doubts and concerns within the political elite regarding the true motivations behind the influx of foreign (American and Turkish) companies into Somali oil and gas exploration. This arises in a sensitive transitional security phase for the country, nearing the completion of the African Transition Mission Forces (ATMIS) in December 2025. Economically, challenging questions regarding the nature and future of these projects and their potential negative impacts on investment in other vital sectors such as agriculture, livestock, and fisheries are raised in a scenario lacking a central government capable of overcoming challenges. This precarious situation could lead to Somalia’s oil wealth falling into the hands of foreign companies pursuing their interests. Will President Hassan Sheikh Mahmoud’s government navigate away from the pitfalls that have ensnared several African nations in similar entanglements, with those nations still paying steep prices to correct past mistakes while failing to enjoy the promised benefits of oil and gas?
References
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