In an article I penned on February 5, 2024, entitled “The Horn of Africa States: The Potential of Oil And Gas In Regional Integration (Part III)”, and published in Eurasia Review, I wrote that “About four decades ago, many international companies rushed to the region, but then withdrew on ‘force majeure’ issues when the region entered into a new cycle of violence. These international companies included among others ConocoPhillips, Shell (Pectin), Amoco, Eni, Total and Texaco. They reported that they would come back when peace came back to the region, which seems to be as elusive as ever.”They have not come back yet. In their place, the Turkish Petroleum Corporation (TPAO) appears to be taking a leading role in the exploration for oil and gas in Somalia. The TPAO was initially involved mostly in offshore oil exploration in Somalia’s Indian Ocean coast but is now moving inland. It was announced on Daily Sabah, the Turkish online newspaper on April 10th, 2025, that the TPAO and the Somali Petroleum Administration (SPA) have signed together a “Hydrocarbon Exploration and Production Agreement” for onshore areas, taking cooperation between Türkiye and Somalia to a new and stronger level.
Türkiye and Somalia
Türkiye and Somalia cooperation in the field of petroleum exploration has been going on smoothly since the two countries signed an economic cooperation agreement in February 2024. But the interest of American and British companies and others have not been on the wane either.
The CEO of the American Coastline Corporation, Richard Anderson is reported to have said that Somalia enjoys “tens of billions of extractable barrels of oil,” while other companies put Somalia’s reserves at some 110 billion barrels. Although as yet untapped, it positions Somalia as a future oil-producing nation, which will introduce new dynamics into the global and African energy markets – (Source: World Policy Hub: Oil and Gas Exploration in Somalia: Available Potentials and Possible Implications, March 5th, 2025).
Will the TPAO succeed, where western companies did not for nearly seventy years? It is a major question, but the way things are currently moving, Somalis appear to have a high expectation in this regard. They appear to be in a frantic search to find solutions for their country’s weak and almost dying economy. They want to get out of the dependency that appears to have been imposed on the country over the past four decades.
It is reported that Somalia does, indeed, have a potential in producing oil and gas both onshore and offshore. The interest of many foreign companies in the country’s oil and gas exploration business beyond TPAO evidences that there are possibilities.
The Opportunities
Somalia has for some years now been working on putting in place the laws to manage its petroleum and other resources and it is fortunate that it has, indeed, completed all these laws related to facilitate agreements and partnerships with major global companies and countries. It has also put in place a Somali oil law for sharing financial returns and wealth between the various member states and the federal Government. This should mitigate legal obstacles both within Somalia and with others be it foreign companies or governments.
Many countries are also interested in the oil and gas industries of Somalia. These include among others Norway, Türkiye, Qatar, the United states, Britain and Italy. These countries and companies are reported to be actively pursuing the exploration and extraction of oil and gas in Somalia, which is expected to be just over the horizon.
The Obstacles
The security complexities of Somalia and its fragile governance infrastructure will no doubt remain key obstacles to a smooth processing of the oil and gas exploration and extraction processes. The country has been in a state of chaos for over four decades and it will take time before the population calms down. At present the governance system, despite its weaknesses and drawbacks, has to grapple with terrorism and factionalism. Many of these evil activities are mostly used by forces behind curtains, and they are said to be some of the countries looking for opportunities in Somalia. Vigilance on the part of the government will be key to fend off these evil forces.
The weak infrastructure of the country including lack of skills in the oil and gas industries and/or wrecked roads, bridges and other physical infrastructures, will weigh heavily on the exploration and extraction of oil and gas and this will require import of skilled labor in this regard and heavy construction work to prepare for the exploration and extraction of oil and gas both on land and offshore.
Prosperity or a Curse
Many resource-rich countries and particularly those with limited management capabilities usually suffer from what is termed as ‘Resource Curse’, which generally leads to less economic growth than expected, weaker governance institutions and more conflicts than they bargained for, before the exploitation of these resources.
It results from mismanagement, corruption and over reliance on one resource exploitation, ignoring other sectors which could have contributed to the economic growth of these countries. The presence of oil and gas in the country is now almost a certainty as the interest of so many companies and countries clearly evidence it. Somalia must, therefore, avoid falling into the trap of resource curse, taking into consideration the chaos and anarchy it is trying to rise from.
While this may appear difficult, the only way Somalia can benefit from the potential oil and gas resource in these sensitive transitional times is to adopt a developmental philosophy. The main pillars of such philosophy are diversified economic architecture such as food self-sufficiency, manufacturing, other mining resources, fishing and maritime businesses with transparency in all these activities and good governance.
We can conclude that petroleum exploration and extraction in Somalia, presents both good possibilities and obstacles as noted earlier. It will certainly contribute to an expansion of the economic pie of the country and make it quasi-independent from the previous over-reliance on international aid. This should bring in improved infrastructure, better services for the public and more efficient institutions, than has hitherto been the case and in particular with respect to education healthcare services and others.
But Somalia also needs to take care of its environment and must, therefore, put in place environmental safeguards, using environmentally safer technologies. Fairness and equitable distribution of the new wealth will lead to better citizens. It is where corporate and state responsibility will both play important roles should the country wish to avoid a resource curse.
Impact on other sectors
Development of the oi and gas business would provide major opportunities for other companies, local or otherwise, in the energy and electricity generation, transmission and distribution networks across the vast country, procurement of equipment and other necessary technologies. Even wind, solar, and other renewable energies will present new possibilities. There will definitely be operational and maintenance contracts, consulting services, mining and, of course, debt and equity financing, mostly on Islamic financing basis, such as sukuks and leasing.
Despite the doomsaying
Despite the doomsaying that humanity is at the end of its tether with respect to oil and gas, one thing is clear, the industry is part of the fabric of present-day human life systems. It is involved in almost every aspect of life beyond energy and demand for it, according to the International Energy Agency (IEA), should be increasing to 103.5 million barrels of oil per day by 20240 (Source: International Association of Oil and Gas Producers website). This indicates that Somalia has a good chance of exploiting the vast reserves of both hydrocarbons, it is reported to contain.
