The Norway-based seismic data company TGS-NOPEC has entered into an agreement with the Federal Government of Somalia, specifically with the Somali Petroleum Authority (SPA).
This agreement grants TGS the rights to market, license, and put out to tender oil exploration and extraction rights within Somaliland’s land and maritime territories. The areas included are those previously surveyed by TGS, as detailed in the maps and blocks attached to the agreement.
TGS has held the primary exploration data for most of Somaliland’s oil blocks for many years. The initial data acquisition began during the administration of former Somaliland President Dahir Riyale Kahin, and subsequent governments have renewed the company’s agreements.
What are the implications of this deal?
This new agreement, signed on the 22nd of this month, effectively allows Somalia to directly receive all revenues generated from the oil exploration data pertaining to Somaliland. Analysts suggest it fundamentally undermines Somaliland’s claim to sovereignty over the oil and gas resources within its own borders.
Furthermore, by transferring this data to the Somali government, TGS appears to have invalidated its previous agreements with the Somaliland government.
What are Somaliland’s options?
To date, the Somaliland government has not issued an official statement regarding the agreement between Somalia and TGS. Its official response and subsequent actions remain to be seen.
Observers note that Somaliland must respond decisively and quickly to this development. A failure to do so could see this agreement follow the path of the airspace control deal, which was initially contested but has now become a significant political and economic burden.
Will this deter foreign investment in Somaliland?
The new agreement explicitly permits TGS to subcontract or share the oil data with other companies. It is widely anticipated that Turkish companies will be primary beneficiaries, following a separate oil and gas cooperation deal signed between Somalia and Turkey last year.
Any foreign company attempting to operate in Somaliland’s territory based solely on an agreement with Mogadishu would face severe practical and security challenges, especially on land. However, the maritime domain presents a more complex defensive scenario for Somaliland, requiring urgent strategic attention to safeguard its offshore resources.
