London-listed player is in talks with Somaliland suitors as it prepares to drill a new exploratory well, Toosan-1, which could find 650 million barrels of oil. Before starting this drilling, Genel plans to sell a portion of its ownership in the onshore oil block
Genel Energy is in talks with “a number of companies” about farming into a frontier exploration block onshore Somaliland where a wildcat is due to be drilled in 2025, according to a key executive at the London-listed player.
No commercial hydrocarbons have been discovered in Somaliland, but this could be because only 19 wells have been drilled there, the last in 1989.
However, according to a farm-out document, its petroleum plays have been “significantly derisked by association with the Yemeni basins,” on the other side of the Gulf of Aden, where more than 5 billion barrels of oil equivalent of resources have been found to date.
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Background of Genel’s exploration in Somaliland
Somaliland is a highly prospective, onshore exploration province, and Genel is targeting resources of over two billion barrels of oil.
In August 2012, Genel was awarded an exploration license for onshore blocks SL-10-B and SL-13 in Somaliland. Genel extended its presence in November 2012 with the acquisition of a 50% participating interest in the Odewayne Production Sharing Agreement, which covers blocks SL-6, SL-7, and SL-10A.
Onshore Somaliland is a relatively unexplored region, with few exploration wells drilled. The total size of the blocks is approximately equivalent to the entire Kurdistan Region of Iraq.
In December 2021, Genel announced the signing of a farm-out agreement relating to the SL10B13 block with OPIC Somaliland Corporation (‘OSC’), with all its share of future capital investment coming from CPC Corporation, Taiwan, the state-owned enterprise of Taiwan. Under the agreement, OSC received a 49% working interest in the block for a cash consideration of 49% of all Genel’s historic back costs, plus a cash premium. Genel previously held a 100% working interest and will continue as an operator.
Preparation is now underway for the drilling of a well on the highly prospective SL10B13 block. The prospect to be drilled has been identified and agreed upon with our partner, and an optimal well location selected in order to best target the stacked Mesozoic reservoir objectives with individual prospective resource estimates ranging from 100 to 200 MMbbls.
The Environmental, Social, and Health Impact Assessment is now complete, and civil work continues for the drilling of the Toosan-1 well on the highly prospective SL10B13 block (51% working interest and operator).
Civil works are now nearing completion, and, in line with Genel’s focus on reducing costs, the company will assess the timing of further investment based on the financial outlook at the time.
The prospective SL10B13 area is c.150 kilometers from the port at Berbera, offering a route to international markets.
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However, according to a farm-out document, its petroleum plays have been “significantly derisked by association with the Yemeni basins,” on the other side of the Gulf of Aden, where more than 5 billion barrels of oil equivalent of resources have been found to date.
