Somaliland says has huge, unexplored oil potential

CAPE TOWN (Reuters) - The break-away African nation of Somaliland has huge hydrocarbon potential but is virtually unexplored, an African oil conference heard on Tuesday.

Hussein Abdi Dualeh, Somaliland’s mining and energy minister, said the country was off investment radar screens not least because many people did not even know it existed.

But he told delegates at the annual Africa Oil Week series of conferences that geography and geology highlighted its oil and gas potential.

“There is very high potential for considerable reserves of hydrocarbons in Somaliland but it is one of the least explored countries in the region,” he said.

He said even by the East Africa’s under explored standards, Somaliland was a frontier with only 21 wells drilled.

But he noted that the geology of Somaliland was similar to oil-rich areas across the Gulf of Aden.

East Africa have yet to produce a commercially viable oil source but gas discoveries off Mozambique and Tanzania have prompted lots of interest though the region remains largely unexplored.

Oil discoveries would be a cash boon to Somaliland though hydrocarbons have often proven to be a curse to African nations as the opaque nature of the industry often breeds corruption.

Somaliland declared its independence from Somalia in 1991 but has not been formally recognised internationally.