After years of promise, Somaliland’s oil ambitions remain stalled by delays, investor uncertainty, and intensifying regional competition, raising questions about its energy future and economic prospects in the Horn of Africa
HARGEISA — More than a decade after international oil firms first signaled the possibility of commercial petroleum production, Somaliland has yet to extract a single barrel — a delay that has raised questions about governance, investor confidence and shifting geopolitical dynamics in the Horn of Africa.
In 2012, the London-listed Genel Energy secured exploration rights in Somaliland, citing promising geological data in the Togdheer and Daadmadheedh regions. At the time, then-CEO Tony Hayward projected that oil production could begin as early as 2014.
“We were optimistic about the timeline,” Hayward said during a visit that year, pointing to early seismic data indicating substantial hydrocarbon potential.
Yet 12 years after that projected start date, commercial production has not materialized.
A Pattern of Delays
The gap between expectation and execution has persisted across successive administrations. Three different presidents have overseen the oil exploration period, each leaving office without witnessing production — despite repeated assurances that Somaliland’s energy breakthrough was imminent.
In 2023, Energy Minister Cabdillaahi Faarax Cabdi announced the launch of the Toosan-1 exploration well in the Xood area of Togdheer, describing it as a “critical step toward first production.” But three years later, there has been no public confirmation of whether drilling was completed or yielded viable results.
Industry analysts say such opacity has contributed to growing skepticism.
“The absence of transparent updates undermines investor confidence,” said one regional energy consultant familiar with Horn of Africa exploration projects. “In oil and gas, timelines slip — but silence is what raises red flags.”
Structural and Political Constraints
Several factors appear to be hindering progress.
First, Somaliland’s lack of widespread international recognition complicates access to financing, insurance and global energy markets. Without formal recognition, contracts signed with exploration companies can carry higher political risk, discouraging large-scale investment.
Second, infrastructure limitations — from export pipelines to refining capacity — present additional barriers. Even if commercially viable reserves are confirmed, the absence of export-ready systems could delay production timelines by years.
Third, regulatory clarity remains a concern. While Somaliland has issued long-term licenses, often extending up to 20 years, critics argue that unclear legal frameworks and inconsistent policy signaling have slowed momentum.
“Exploration is only the first step,” said a former adviser to an international oil firm. “What matters is whether the legal and commercial environment can support full-scale development.”
Companies Still Waiting
In addition to Genel Energy, firms such as Jacka Resources and Ophir Energy have previously expressed interest in Somaliland’s hydrocarbon potential, citing data suggesting significant onshore and offshore reserves.
Despite these commitments, none have transitioned into production.
Genel Energy, which operates producing fields in the Middle East, has continued to signal long-term interest. The company now suggests that production in Somaliland could begin by 2027 — a revised timeline that underscores the project’s prolonged gestation.
Some analysts believe companies may be deliberately pacing development.
“There’s a strategic logic to delay,” said an industry expert. “If reserves are confirmed but market conditions are uncertain, firms sometimes hold assets rather than rush into production.”
Leadership Promises, Limited Visibility
President Abdirahman Mohamed Abdullahi recently reaffirmed that oil production would move forward. But beyond broad assurances, the government has yet to present a detailed public roadmap outlining timelines, partners or infrastructure plans.
For many Somalilanders, the lack of visible progress has tempered earlier optimism.
“There has always been hope around oil,” said a Hargeisa-based economist. “But hope needs to be backed by tangible progress.”
Regional Competition Intensifies
As Somaliland’s oil ambitions stall, neighboring Somalia is moving ahead with new partnerships that could reshape the region’s energy landscape.
Turkey has expanded its role in Somalia’s hydrocarbon sector through agreements with the federal government in Mogadishu. The state-backed Turkish Petroleum Corporation has launched offshore seismic surveys and exploratory drilling along Somalia’s coastline.
The development carries significant implications.
First, Turkey’s entry introduces a powerful new player into East Africa’s energy sector, challenging the traditional dominance of Gulf states and Western firms.
Second, Ankara’s alignment with Mogadishu reinforces Somalia’s claims over maritime resources — a factor that could complicate Somaliland’s own offshore ambitions.
Third, Turkey’s existing military and economic footprint in Somalia suggests a broader strategy linking energy exploration with security and maritime influence in the Red Sea and Indian Ocean corridors.
Finally, as Somalia accelerates exploration, Somaliland risks losing investor attention unless it can demonstrate regulatory stability and operational progress.
A Strategic Crossroads
Energy analysts say Somaliland now faces a narrowing window to capitalize on its early-mover advantage.
“Timing matters,” said the regional consultant. “If Somaliland cannot convert potential into production, capital will flow to where projects are moving forward.”
Oil exploration in Somaliland was once framed as a transformative opportunity — a pathway to economic independence and geopolitical leverage. Today, it stands as a case study in the complexities of frontier energy development, where geology, politics and global competition intersect.
Whether Somaliland can overcome these constraints — and finally bring its oil sector online — remains an open question.
