Genel Energy to start drilling in Somaliland by 2019

(Former CEO of Genel Energy, Tony Hayward giving a press conference in Hargeisa with former Somaliland Cabinet Ministers in 2013)

Latest developments

On 22nd March 2018, major oil company, Genel Energy announced via its Chief Executive Murat Ozgul that Genel may start drilling in Somaliland next year.

The Chief Executive had this to say;
“For the long term, I really like [our] Somaliland exploration assets. It’s giving me a sense of Kurdistan 15 years ago,” Mr Ozgul said. “In 2019 we may be [starting] the drilling activities,” Reuters reported.

Background to Genel Energy operations in Somaliland

In August 2012, under its former CEO, Tony Hayward, Genel Energy was awarded an exploration licence for onshore blocks SL-10-B and SL-13 in Somaliland, with a 75% working interest in both. Genel extended its presence in November 2012 with the acquisition of 50% participating interest in the Odewayne Production Sharing Agreement which covers blocks SL-6, SL-7, SL-10A. The total size of the blocks is approximately equivalent to the entire Kurdistan Region of Iraq. It was under the administration of former President Ahmed Mohamed Mohamud “Silanyo” that Genel Energy entered Somaliland’s hydrocarbon market because of encouraging indications including onshore oil seeps. Genel Energy was also buoyed by existing geological data showing favourable conditions for hydrocarbons to have accumulated in numerous large tilted fault blocks and sub-basins.

Genel Energy acquisition of seismic data

For Genel Energy’s Somaliland operations, the acquisition of crucial seismic data commenced in March 2017. The data was acquired as part of a Somaliland government owned speculative 2D seismic acquisition project, with Genel purchasing the associated data from the government in tranches. This 10-month seismic acquisition project was completed in January 2018 with the full acquisition of data. This was the first time that seismic data has been obtained in this highly prospective area for over 25 years. The project acquired c.3,150 km of seismic data in total.

Currently, Genel Energy is engaged in the processing of the seismic data. Genel Energy and its partner, the Somaliland government are anticipating that the seismic interpretation and the associated development of a prospect inventory will in turn guide the optimal strategy to maximise future value for Somaliland’s hydrocarbon sector.

According to Genel Energy’s latest trading and operations update and release of the Company’s full-year 2017 results;

• Genel Energy has earmarked US$10 – 15 million for its 2018 African exploration costs. Analysts have observed that this conveys that Genel Energy is entirely committed to its operations in Somaliland vis-à-vis the Odewayne block and blocks SL-10 B and SL-13.