Turkish oil giant Genel Energy PLC announced on Monday that it had purchased a license to search for petrol in Somaliland, an enclave of Somalia that has been independent from the failed East African state since 1991.
The oil firm, which has extensive investments in semi-autonomous Iraqi Kurdistan, cited in a Monday press release “geographical similarities” between the breakaway territory and the nearby resource-rich Arab Peninsula. The bulletin suggested that Genel Energy would begin a survey of the self-declared enclave in the near future and projected that prospecting for oil and coal in the region would require one to one-and-a-half years.
Lacking international recognition, Somaliland nevertheless enjoys a degree of governance, security and economic development wholly absent in the broader Somalia, from which it declared independence in 1991.
Genel Energy PLC, which is owned by Turkish billionaires Mehmet Emin Karamehmet and Mehmet Sepil as well as British investors, said in the Monday announcement that it would draw on its experience drilling in northern Iraq as it launches its Somalia project. This year the company broadly expanded its presence in the northern Iraqi territory through the purchase of majority stakes in the Bina Bawi and Miran blocks, two of the region's largest and potentially most valuable oilfields.
The company reports that the Somaliland license has secured it an area half as large as its holdings in northern Iraq. While it did not specify the extent of the investment it is planning in Somaliland, it suggested that the firm has roughly $1 billion in cash on hand for new investments.
The remote enclave has seen a flood of attention from international oil firms this year, with Australian oil firm Jacka Resources, London-listed company Ophir Energy, unlisted British Oil explorer Asante Oil and Jersey-registered Prime Resources signing survey deals with the Somaliland government this year. A World Bank report recently judged the region as sufficiently stable for private investment projects.
Genel Energy merged with British oil firm Vallares -- a British venture owned by former British Petroleum (BP) CEO Tony Hayward and financier Nat Rothschild -- in November 2011 and became Genel Energy PLC, the first and only Turkish firm that is traded on the London Stock Exchange. Aside from the seven oil exploration licenses it holds in northern Iraq and its newly acquired Somaliland license, it also has licenses to drill in the territorial waters of the Mediterranean island nation of Malta and in Ivory Coast.