Somalia's Ministry of Petroleum and Mineral Resources has announced it will open competitive bidding for the country's oil blocks by year's end, the ministry's Director General, Mohamed Hashi Arabey, said in remarks carried by the state news agency SONNA. The licensing round is intended to draw international energy companies to acreage the government considers among the most prospective on the East African margin.
Director General Mohamed Hashi Arabey on the planned licensing round. Clip: SONNA
A competitive round changes how value is established. Rather than terms agreed bilaterally between the state and a single company, blocks are offered openly and awarded against competing bids, with companies measured on signature bonuses, work commitments and the fiscal share returned to the state. In frontier basins this is the standard mechanism for benchmarking acreage and setting a market price for exploration rights, and it gives the awarding authority a clearer basis for comparing the technical and financial capacity of bidders.
Somalia has more than 200 designated offshore blocks along a coastline of over 3,000 kilometres, of which only a small number have been licensed. The ministry has also assembled a seismic dataset of roughly 48,000 kilometres of 2D survey alongside newer 3D coverage, the technical groundwork a round requires to define and price these individual blocks.
The government launched a licensing round in 2020, offering seven offshore blocks, but it was repeatedly extended and no block was ever awarded through a completed competitive bid. The blocks taken up since, including offshore agreements from 2022 onwards and the rights held by Turkey's TPAO, were granted by direct negotiation rather than open tender. The announced round therefore revives an objective the government has set before, one that has been challenging to meet.
