Shell, Xom sign settlement with Somalia

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Supermajors Royal Dutch Shell and ExxonMobil last week signed a settlement letter with the Federal Government of Somalia regarding drilling blocks under force majeure, Kallanish Energy learns.

The companies hold exclusive petroleum exploration and production rights over five offshore blocks in Somalia under a concession agreement, although the latter has been under force majeure since 1990.

The licenses were acquired in the 1980s during the military dictatorship of Gen. Mohamed Siad Barre, who was deposed in 1991, marking the start of the civil war. Exploration activities stopped and force majeure was declared.

The companies accrued an annual surface rental fee payable to the Federal Government of Somalia since, and there have been discussions on how and when to process the accrued annual surface rental fee payment.

“On 21 June 2019, Shell EP Somalia B.V, Mobil Exploration Somalia Inc., and the Federal Government of Somalia signed a settlement letter which enables the payment to be made,” said a spokesman for Shell in an email sent to Kallanish Energy.

“This payment does not affect force majeure status, which remains in place,” he added.

Kallanish Energy

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