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Due to its proximity to the oil-rich Gulf Arab states such as Saudi Arabia and Yemen, Somalia is believed to contain substantial unexploited reserves of oil. A survey of Northeast Africa by the World Bank and U.N. ranked it second only to Sudan as the top prospective producer.

The country has only 200 billion cubic feet of proven natural gas reserves. It currently has no hydrocarbon production. Oil seeps were first identified by Italian and British geologists during the colonial era. Exploration activities were focused in northern Somalia, and several foreign firms, including Agip, Amoco, Chevron, Conoco and Phillips, held concessions in the area. The firms all declared force majeure following the collapse of the central government.

American, Australian and Chinese oil companies, in particular, are excited about the prospect of finding petroleum and other natural resources in the country. An oil group listed in Sydney, Range Resources, anticipates that the Puntland province in the north has the potential to produce 5 billion to 10 billion barrels of oil. As a result of these developments, the Somali Petroleum Company was created by the federal government.

In mid-2010, Somalia's business community also pledged to invest $1 billion in the national gas and electricity industries over the following five years. Abdullahi Hussein, the director of the just-formed Trans-National Industrial Electricity and Gas Company, predicted that the investment strategy would create 100,000 jobs, with the net effect of stimulating the local economy and discouraging unemployed youngsters from turning to vice. The new firm was established through the merger of five Somali companies from the trade, finance, security and telecommunications sectors. The first phase of the project is scheduled to start within six months of the establishment of the company, and will train youth to supply electricity to economic areas and communities. The second phase, which is slated to begin in mid-to-late 2011, will see the construction of factories in specially designated economic zones for the fishing, agriculture, livestock and mining industries.

Oil & Gas Companies

Several key players are involved in oil exploration in the Puntland region of Somalia:

  • Africa Oil Corp.: formerly Canmex Minerals, an oil company based in Vancouver, British Columbia Canada.
  • Range Resources: a mineral exploration company based in Perth, Western Australia and Melbourne, Victoria, Australia
  • Puntland State government of Somalia: where the Nogal and Dharoor blocks are located
  • The Transitional Government of Somalia

Other companies include Somali Petroleum Company (SPC), which is a petroleum exploration and production company in Somalia. It was created by the Transitional Federal Government of Somalia on 19 August 2008 in order to manage and develop Somalia's hydrocarbon resources.

Key Figures

  • Oil production: 0 bbl/day(2008)
  • Oil Consumption: 5,000 bbl/day(2008)
  • Oil Exports: 1,475 bbl/day(2007)
  • Oil Imports: 6,387 bbl/day(2007)
  • Oil Proved Reserves:0 bbl (2009)
  • Natural Gas Production: 0 cu m(2008)
  • Natural Gas Consumption: 0 cu m (2008)
  • Natural Gas Exports: 0 cu m (2008)
  • Natural Gas Imports: 0 cu m (2008)
  • Natural Gas Proved reserves: 5.663 billion cu m(2009)

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