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Kuwait Energy inks Somali state oil firm deal

Kuwait, August 19, 2008

Kuwait Energy Company (KEC) has signed a partnership agreement with the Somali government and Indonesia's PT Medco Energi Internasional to set up a state oil firm in Somalia, KEC's chief executive said.

Under the terms of the agreement, the Somali government would own 51 per cent of the Somalian National Petroleum Corp (SNPC), while the rest will be divided between KEC and Medco, KEC's Sara Akbar told CNBC Arabiya television channel late on Monday.

The SNPC would soon issue a tender for oil and gas exploration, opening up acreage to bids from international oil and gas companies, Medco's International Director Grant Bowler told the TV channel in comments to be aired on Wednesday.

Bowler said he expected the bid round to start before the end of next year.

The new company will be responsible for oil and gas exploration, refining and petrochemical activities, Akbar said in the interview.

Akbar told Reuters last year that KEC was assisting in the development of Somalia's oil and gas sector and had high hopes for its future production.

Somalia is a speculative bet for oil exploration and has no proven oil reserves, with around 200 billion cubic feet of proven gas reserves, according to the US Energy Information Administration.

In the 1980s, oil majors including ConocoPhillips, Chevron and Total held exploration concessions there. They left when the nation descended into chaos in 1981.

KEC is a small independent oil and gas exploration and production company founded in 2005.-Reuters




Tags: Kuwait Energy | deal | Somali oil |

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