Kenya to push exploration by ending Somalia border dispute


Kenya to push exploration by ending Somalia border dispute


NAIROBI (Bloomberg) -- Kenya, East Africa’s largest economy, expects to resolve a maritime border dispute with Somalia to expand oil and gas exploration in the area.

Kenya lodged a claim with the United Nations for the boundary to run parallel with lines of latitude in the Indian Ocean, said the energy ministry’s senior geologist Felix Mutunguti. Somalia is ready to negotiate, said the country’s National Resources Minister Abdirizak Omar Mohamed.

It should be a similar border as “with Tanzania to the south coast,” Mutunguti said in an interview in Nairobi. “Our friends in Somalia may have contrary thoughts, but that is in the process of being resolved.”

Kenya, which has attracted explorers including Total and Anadarko Petroleum, is headed to become the first oil exporter in East Africa. The dispute with its unstable neighbor has delayed exploration, and could sour relations and even lead to war, according to Kim Moss, an analyst at Future Directions International.

“It’s actually not a disputed area from our perspective,” Mohamed said. “Somalia is ready to start dialogue with Kenya” and “resolve it in a peaceful way.”

Kenya last year ended talks with Statoil over rights to explore the L25 Block in the Indian Ocean, which is bordering Eni’s and Total’s acreage in the nation’s northern waters. That permit along with L26 are open for bidding next year, Mutunguti said.

“The subsurface is very, very appealing,” said Osman Shahenshah, the CEO at Afren, whose company has 80 % in Kenyan Block 1 bordering Somalia and Ethiopia. “Obviously the postcode is challenging.”

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