MOGADISHU ( Halbeeg News) – Somali ministry for petroleum has announced that Royal Dutch Shell (RDSa.L) and Exxon Mobil (XOM.N) are mulling to resume their operations in Somalia.
The two companies have seized their operations in 1990 when the country plunged into civil war.
During the reign of late president Mohamed Siyad Barre, the two had a joint venture on five offshore blocks in Somalia.
The exploration and development of the five offshore blocks were suspended in 1990 under what is known as a “force majeure”.
In a statement, the ministry said
Supermajors Royal Dutch Shell and ExxonMobil last week signed a settlement letter with the Federal Government of Somalia regarding drilling blocks under force majeure
“(An) agreement was signed in Amsterdam on June 21st, 2019 and settles issues relating to surface rentals and other incurred obligations on offshore blocks,” the ministry said.
The parties have also agreed to hold talks to convert their old contracts in line with a new petroleum bill that was passed earlier this year.
Under the terms of the country’s new petroleum Revenue Sharing Agreement, or RSA, Somalia’s central government will retain 55% of revenue from future offshore oil production while its member states will receive the remainder, according to an oil ministry statement released on Friday.
For onshore oil output, the federal government will retain 30% of revenue, while member states and their local communities, which are free to decide how to invest the cash, will keep the rest. However, it’s still working on commercial terms for the companies which would operate the oil blocks.
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