A new petroleum law aimed at regulating and attracting major oil companies to invest in Somalia’s oil and gas acreage, has been approved by the upper house of Somalia’s parliament.
The new law, which still needs to be signed by Somalia’s President, H.E. Mohamed Abdullahi Mohamed, before it comes into effect, would provide a legal framework for Somalia and create revenue sharing between the central government and states. Currently, Somalia does not produce any oil, however, seismic data has revealed potential for substantial offshore oil reserves that could transform the country’s economy.
“This is a major step forward for Somalia and its people as the petroleum law is approved by the upper house and moves closer to completing its legislative process,” said Somalia’s Minister of Petroleum and Mineral Resources H.E. Abdirashid Mohamed Ahmed.
The Somali government hopes the petroleum law will help restore the confidence of big oil companies like ExxonMobil and Shell, who once held legacy blocks from the 1990s.