Genel expands in Somalia

Monday, November 12, 2012
By Kelly Gilblom

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NAIROBI (Reuters) - Turkish group Genel Energy is to buy a 50 percent stake in an oil and gas exploration licence in northwest Somalia, expanding its presence in the east African country.
Genel said on Monday it was farming in to a 22,000 square kilometre onshore exploration block located in semi-autonomous Somaliland, known as the Odewayne block.

The block is held by Australian group Jacka Resources and Petrosoma, a subsidiary of British-based Prime Resources, which will retain a 30 percent and 20 percent interest in the venture, respectively.
While east Africa has recently become a major hub of oil and gas exploration activity, Somalia has largely missed out due to violent conflict that has made the Horn of Africa country unstable.
Genel said it will pay $670,000 to Jacka and Petrosoma. It will also cover the cost of drilling one exploration well and acquiring 1,500 square kilometres of 2D seismic survey.

"This block, together with our SL10/13B acreage, means we have built a strong position in an exciting frontier exploration area," Genel said.

In September, Somalia elected a new government, its first permanent government since 1991, giving explorers hope their work could resume.

After the transaction with Jacka and Petrosoma, Genel will become the block's operator and will be responsible for carrying out geological surveys and drilling work.

It has two other exploration blocks in Somaliland and plans to begin drilling in the country in the second quarter of 2014.

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