Shell and Exxon Mobil plan to return to Somalia ahead of an oil bloc bid later this year, the East African oil ministry said.
Before the overthrow of dictator Mohamed Siad Barre in the early 1990s, Shell and Exxon Mobil had established a joint venture on five offshore blocks in Somalia.
The country has been unstable since Barre’s departure and is fighting al Shabaab, an Islamist group that frequently bombs the capital, Mogadishu, and elsewhere in the country.
Exploration and development of the five offshore blocks was suspended in 1990 as a “force majeure”, but Shell and Exxon have since acquired shares in the government, Shell said in a statement.
Exxon declined to comment and referred the inquiries to Shell.
The country does not currently produce oil, but production could transform the economy because the first seismic data showed that there could be large offshore oil reserves.
“An agreement was signed in Amsterdam on June 21, 2019, and settles land lease and other obligations related to offshore blocks,” the ministry said.
The case of force majeure remains in place, whatever the recent evolution, added Shell.
The parties also agreed to hold talks to convert their old contracts into compliance with a new petroleum law that was passed earlier this year.
Somalia hopes to allocate 15 offshore blocks with a potential bid schedule for the month of November. A presentation tour is organized in Houston, Texas, in late September or early October.
The country has also adopted an income-sharing agreement, sharing revenues with the oil producing states, but has not yet decided which government will keep in the blocks it grants.