Turkey signs oil and gas exploration deal with Somalia

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Thursday March 7, 2024

Turkey and Somalia signed an energy exploration and drilling deal on Thursday, further strengthening bilateral ties after concluding a defence agreement last month.

The deal targets hydrocarbon reserves in its exclusive economic zone, which hasn’t been developed since the collapse of the Somali government in the early 1990s. It also includes land exploration.

The agreement was signed by Turkish Energy Minister Alparslan Bayraktar and Somali Petroleum and Mineral Resources Minister Abdirizak Omar Mohamed in Istanbul.

The move came after Ethiopia signed an agreement in January that grants it naval and commercial access to ports along Somaliland’s coast, in exchange for recognition of the breakaways region’s independence.

In response, Ankara signed a comprehensive naval defence deal with Somalia last month, which Mogadishu says mandates Turkey to defend Somali sea waters against terrorism, piracy and any external threat that could violate Somali state rights for the next 10 years.

The “historic” deal also reportedly empowers Turkey to develop Somalia’s maritime resources in its exclusive economic zone.

The Turkish Navy has already operated off the shore of Somalia and in the Gulf of Aden under a UN mission to combat piracy and armed robbery since 2009.

Turkey has years of experience in offshore energy exploration since it discovered gas in 2020 in the Black Sea. Ankara is now developing the gas and pumping it to its local network for domestic consumption.

US government reports indicate Somalia may have at least 30bn barrels of oil and gas reserves, but it requires investment that could take three to five years.

In 2022, the Somali government signed an exploration deal with US-based Coastline Exploration for seven offshore blocks. Drilling is planned to start in 2025.

Somaliland, the northern autonomous breakaway region with no international recognition, also signed an oil exploration deal with the London-based Genel Energy in 2022. The drilling, in an area potentially containing 5bn barrels of oil, is set to start later this year.

Mogadishu views the deal as illegitimate and considers it null and void.

Challenges and costs

The Turkey-Somalia deal would require extensive efforts on the Turkish side to drill and develop resources, according to a Turkish energy expert.

“Turkey signed a similar land and offshore exploration deal with Libya in 2022 but the progress has been non-existent,” said the expert, who did not wish to be named to freely express his opinion.

“Turkey’s exploration and drilling ships are largely slated for the Black Sea blocks, but Ankara could deploy Turkish petroleum drillship Abdulhamit to Somalia if it wants.”

The expert assessed that Turkey would have to spend up to half a billion dollars to conclude an exploration and successful drilling operation in Somali waters and further development of gas or oil would cost at least a few billion dollars.

It is not clear whether Turkey would look for private or public partnerships to finance the projects.

“The West is increasingly targeting green energy and working on hydrocarbons is becoming more and more inefficient as funding is scarce,” the expert said. “Somalia would appear as insecure to many companies, but Turkish naval presence and military assistance against terrorism may ensure some interest.”

Turkish President Recep Tayyip Erdogan's government has invested a significant amount of money into Somalia since 2011, establishing the largest Turkish embassy in the world in Mogadishu and extending more than $1bn in humanitarian aid to the country in response to a deadly drought.

Turkey now has a large military base in Mogadishu, and Turkish firms operate the city's airport and port. It is estimated that Turkey has trained more than 16,000 Somali soldiers, an equivalent of one-third of the military, both on Turkish soil and in its Mogadishu base, known as Turksom.

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