Somalia’s upstream oil and gas industry will benefit from greater investor confidence and undergo subsequent growth in the years to come, if the Somalian government provides the political stability, security and infrastructure required for large-scale development
That’s according to an analyst with research and consulting firm GlobalData.
John Sisa, Lead Upstream Analyst for GlobalData, says that after emerging from two decades of civil war and establishing a central government, Hassan Sheikh Mohamoud, president of the Federal Government of Somalia (FGS), now has one eye on the promise of petro-revenues and another on establishing authority over the regional governments.
Sisa believes the potential growth of Somalia’s oil and gas industry depends highly on a cooperative definition of the Somali Petroleum Law between both sides – a successful resolution of the pressing issues between the FGS and Somaliland governments will help to increase stability and therefore encourage further investment in the region’s oil and gas exploration industry.
While not focusing on Somalia in particular, a recent gasworld Business Intelligence report on the industrial gases market in East Africa highlights the development of the region’s hydrocarbon resources as providing potential upsides for the gases industry going forward.
“Any development of East Africa’s hydrocarbon sector is expected to benefit the industrial gases business in the region. There is a lot of potential for industrial gas companies to introduce new applications and new forms of doing business…”
By and large, the economies of East Africa have performed well in recent years, with growth enabled by macro-economic policy aimed at encouraging the formation of new businesses, increasing foreign direct investment, and accelerating targeted investment in critical infrastructure.
All of which has seen the commercial industrial gases market in East Africa reach a value of around $79m in 2012, up from $25.5m in 2002 and indicating an average annual growth rate of 12% for the decade. Any development of East Africa’s hydrocarbon sector is expected to benefit the industrial gases business in the region.
There is a lot of potential for industrial gas companies to introduce new applications and new forms of doing business, to better leverage the strong economic growth expected in the region in the years to come. Within the 2012-2020 timeframe, the report suggests, forecast models predict growth from 6.2% – 10.5% p.a. in the region’s gases market.