Somalia Prepares Its First Offshore Oil Drilling, Eyeing Reserves in the Billions of Barrels

Somalia is preparing to commence its first offshore oil drilling operations, with reserves estimated to hold billions of barrels. The federal government in Mogadishu confirmed the operational readiness of selected blocks in early May 2026, marking the conclusion of a decades-long process held up by civil conflict, jurisdictional disputes between the federal government and federal member states, and a maritime boundary dispute with Kenya that the International Court of Justice resolved in 2021.

What is in the ground (or under the seabed)

Seismic data acquired from 2019 onward, refined in 2023, suggests a hydrocarbon system in Somalia's offshore Indian Ocean territory comparable in geological structure to neighbouring Mozambique and Tanzania, both of which have produced significant gas discoveries. Initial estimates put recoverable reserves in the billions of barrels of oil equivalent, although uncertainty is high until appraisal drilling delivers actual data. The government has emphasised that early estimates are exploratory.

Who is involved

The licensed operators include a mix of mid-tier international companies and at least one major. Specific assignments and block allocations were finalised through 2024-2025 under the Somali Petroleum Authority. Local content requirements oblige operators to engage Somali contractors and train Somali engineers; how meaningfully these are implemented will be one of the early tests of the regime.

The political architecture

Somalia's 2020 Petroleum Law established a federal-level Somali Petroleum Authority and a revenue-sharing arrangement among the federal government, federal member states and producing communities. The arrangement is contested: Puntland has run its own resource governance for years, and several federal member states have pushed for larger shares. Whether the federal arrangement holds under actual revenue flow is one of the structural risks of the project.

The international risk

The al-Shabaab insurgency continues. Offshore facilities are less exposed than onshore but the supply chain — port handling, personnel rotation, helicopter operations — is not. Insurance pricing for Somali offshore work is materially above peer-country levels. International oil companies have been cautious about deeper commitments until on-ground security stabilises further.

Why it matters

If Somalia's basin produces at scale, it is one of the most consequential new hydrocarbon stories in Africa over the next decade — comparable in significance to Senegal-Mauritania, Namibia and Mozambique. For a country whose state-building has been arrested by conflict and external dependence, oil revenue offers fiscal autonomy that no aid programme can replicate. It also offers an exposure to commodity-price cycles, governance temptations and federal-state friction that Somalia is not yet fully ready to manage.