IN SHORT: Somalia is preparing to launch its first offshore oil drilling operations, tapping into reserves estimated to hold billions of barrels beneath its Indian Ocean seabed. The development marks a potential structural transformation for one of Africa’s most conflict-affected economies, which has been making steady governance and security progress under President Hassan Sheikh Mohamud since 2022.
Somalia is preparing to drill for offshore oil for the first time in its history, opening a resource frontier that has been locked behind decades of conflict and institutional dysfunction and could, if commercial reserves are confirmed, fundamentally alter the fiscal and economic trajectory of the Horn of Africa’s largest country by land area.
Somalia’s offshore sedimentary basins have long been identified by geologists as prospective hydrocarbon territory. The country’s exclusive economic zone in the Indian Ocean covers approximately 830,000 square kilometres, and preliminary seismic surveys conducted before and after the civil war identified structures consistent with significant oil and gas accumulations.
- The move toward first drilling represents a milestone in Somalia’s long and complex relationship with its own resource potential. Civil war from 1991 to the early 2010s made commercial exploration impossible for two decades. The subsequent period of fragile stability allowed limited institutional rebuilding but not the stable security environment, clear contractual frameworks and functioning petroleum regulatory system needed to attract serious upstream operators. The current preparation for drilling reflects the Mohamud government’s progress on all three fronts since taking office in May 2022.
- Somalia signed a revenue-sharing agreement with the federal member states in 2020 that resolved, at least temporarily, the most contentious domestic dispute about who would control petroleum resources. That agreement gave international oil companies the legal certainty they needed to take Somalia’s exploration blocks seriously. Without clarity on revenue sharing between the federal government and regional administrations, no international operator would commit capital to a drilling programme.
- The reserves estimate of billions of barrels is preliminary and should be treated as such. Geological prospectivity, even based on quality seismic data, does not guarantee commercial discovery. The Red Sea basin, adjacent to Somalia’s northern coast, has produced significant discoveries in recent years. The offshore basins further south remain less explored. The move to first drilling is the critical step: it converts geological hypotheses into confirmed or negated resource assessments.
- Somalia’s current fiscal position makes the resource upside particularly significant. The country remains heavily dependent on donor assistance, with domestic revenues constrained by a narrow tax base, limited banking infrastructure and an economy still recovering from decades of conflict. Oil revenue, even at modest levels initially, would give the federal government fiscal independence that has been structurally unavailable since the state collapse of 1991.
- The Hormuz context adds a layer of strategic timing. The Iran war has disrupted global oil supply routes and elevated the strategic importance of Indian Ocean energy security. Somalia’s offshore positions it directly on the shipping routes between the Gulf of Aden and the global ocean, and any commercial production would access a market that currently has a premium on non-Hormuz supply.
- International oil company interest in Somalia has been growing. TotalEnergies, Shell and BP have all at various points assessed Somali acreage. Whether any of them is the operator behind the current drilling preparation has not been confirmed.
President Mohamud has consistently framed resource development as central to his government’s economic sovereignty agenda, describing Somalia’s offshore as “a resource that belongs to the Somali people and will serve their development.”
The Bigger Picture: Somalia drilling for oil is a story about far more than hydrocarbons. It is a story about a state that was written off as permanently failed and is now pursuing the institutional development required to manage a resource economy. The path from first drill to commercial production, revenue collection, benefit distribution and avoiding the resource curse is long, fraught and has tripped up better-governed countries than Somalia. But the path starts with the first well. The preparation for that well is, measured against where Somalia was fifteen years ago, one of the most remarkable institutional recoveries on the continent.
Source: Amplify Africa, May 2026
