Genel Energy says work on Somaliland’s highly prospective Toosan-1 exploration well is ongoing, reinforcing confidence in Somaliland’s energy potential despite regional instability affecting operations in Iraq
Genel Energy plc has reaffirmed its commitment to Somaliland’s emerging hydrocarbons sector, announcing continued progress toward the drilling of the highly anticipated Toosan-1 exploration well, even as geopolitical instability in the Middle East weighed heavily on its operations elsewhere.
In a trading and operations update released Thursday, the London-listed energy company said work on the Toosan-1 prospect in Somaliland’s SL10B13 block remains ongoing, with the company still targeting drilling activity in 2027.
The update places Somaliland increasingly at the center of Genel’s long-term diversification strategy as the company navigates operational disruptions in Iraq’s Kurdistan Region following U.S.-Israeli military strikes against Iran earlier this year.
“Further progress towards drilling Toosan-1” was listed among the company’s principal objectives for 2026, alongside restoring exports from Kurdistan’s Tawke field and expanding exploration activity in Oman.
The announcement is likely to be viewed in Somaliland as another signal of growing international commercial confidence in the territory’s untapped energy potential and strategic importance along the Gulf of Aden.
Somaliland Gains Strategic Importance
While much of Genel’s quarterly report focused on production interruptions in Iraq, analysts noted that the company devoted unusual attention to its Somaliland operations — a sign that the Toosan-1 project is becoming increasingly significant within Genel’s broader portfolio.
“Work towards drilling of the highly prospective Toosan-1 exploration well is ongoing,” the company said in its statement.
Industry observers have long described the SL10B13 block as one of the most closely watched frontier exploration zones in the Horn of Africa, with estimates suggesting the basin could hold substantial hydrocarbon reserves if exploratory drilling confirms geological expectations.
The Toosan-1 well is expected to become Somaliland’s most consequential modern offshore-linked exploration effort, potentially reshaping the territory’s economic outlook and geopolitical leverage in the Red Sea corridor.
The development also comes as Somaliland continues positioning itself as a stable strategic partner for Western, Gulf, and regional powers seeking alternatives to increasingly volatile maritime and energy routes in the Middle East.
Regional Conflict Reshapes Energy Calculations
Genel’s update underscored how regional instability has altered energy calculations across the wider Middle East and Horn of Africa.
The company confirmed that operations at the Tawke license in Iraq’s Kurdistan Region were temporarily halted after U.S.-Israeli air strikes against Iran on February 28.
According to the statement, production and drilling activity were suspended as a “safety measure” before limited operations resumed in April.
Gross production at Tawke fell sharply during the quarter, averaging 52,800 barrels of oil per day through March 31, compared with 77,270 barrels per day in the previous quarter.
Against that backdrop, Somaliland’s comparatively stable security environment may increasingly appeal to international energy firms looking to diversify operational risk.
Energy analysts say Somaliland’s location near the Bab el-Mandeb Strait — one of the world’s most critical maritime chokepoints — enhances its strategic value at a time when disruptions in the Gulf and Red Sea continue affecting global trade and shipping security.
Financial Position Remains Stable
Despite production setbacks in Kurdistan, Genel reported that its balance sheet remains strong.
The company said it ended the first quarter with $222 million in cash and net cash holdings of $131 million, while continuing to maintain relatively low debt exposure.
Genel also confirmed plans to invest up to $20 million in pre-production assets, including exploration work in Oman and continued advancement of the Somaliland project.
The company stated that activity on Somaliland’s SL10B13 block forms part of its broader effort to build “resilient, reliable, repeatable and diversified cash flows.”
For Somaliland, continued investment by a publicly traded international energy company carries broader significance beyond the immediate exploration programme.
Officials and analysts in the territory have increasingly argued that successful energy exploration could transform Somaliland’s economic prospects, strengthen infrastructure development, and deepen foreign investment interest across sectors including ports, logistics, and maritime security.
A High-Stakes Frontier Bet
The Toosan-1 prospect remains a high-risk, high-reward frontier exploration venture.
Commercial discoveries are far from guaranteed, and frontier drilling campaigns in politically sensitive regions often face logistical, financial, and geopolitical challenges.
Still, Genel’s continued commitment to the project — despite turbulence elsewhere in its operations — suggests the company sees substantial long-term potential in Somaliland.
The company’s latest update signals that Somaliland remains firmly on the radar of international energy investors at a time when competition for strategic access points along the Red Sea and Gulf of Aden is intensifying.
Whether Toosan-1 ultimately delivers a major discovery may help determine not only Genel Energy’s future growth trajectory, but also Somaliland’s ambitions to emerge as a serious player in the regional energy and maritime economy.
