Somalia recently rejected a bid for oil permits by Genel Energy. The company reportedly attempted to illegally acquire the rights to explore and produce oil in the country.
Genel Energy is a British oil and gas exploration company based in Turkey and is owned by the Turkish billionaire Mehmet Karamehmet.
The rejection of Genel Energy’s bid is an exceptional measure for Somalia’s government. Somalia has long been a country plagued by political instability, civil war, and terrorism. However, the nation has seen a resurgence in recent years and is slowly beginning to rebuild its economy.
The oil exploration rights sought by Genel Energy were initially granted by the Somali government to the company in 2013. However, the rights were revoked in 2019 following allegations that the company had attempted to illegally acquire them.
The Somali government has justified its decision to reject Genel Energy’s bid by citing the company’s past attempts to illegally acquire the rights. The government also cited the fact that the company had failed to meet its contractual obligations with the government. This news is a major blow to Genel Energy, who had hoped to capitalize on the resurgence of Somalia’s economy by acquiring the rights to explore and produce oil in the country. The company had already invested heavily in the country, and its failure to acquire the rights could cost the company millions of dollars.
No immediate response was received from Genel Energy and Somaliland officials when requested for comment.
The London Stock Exchange-listed company incorporated Somaliland into its exploration portfolio in 2012 and, last year, signed a farm-out agreement with OPIC Somaliland Corporation for a block close to Ethiopia. Genel reported that its geotechnical survey in Somaliland was completed earlier this month.
As the discoveries of hydrocarbons in Uganda and Kenya and the huge gas finds in Mozambique and Tanzania have generated considerable interest among investors in the potential of other East African regions for hydrocarbons, Somalia inked a petroleum exploration agreement for seven offshore blocks with Coastline Exploration of the USA in October 2022.