Kuwait Energy Company is assisting the development of Somalia's oil and gas sector and has high hopes for the country's future production, KEC's chief executive Sara Akbar told Reuters last week.
KEC has a preliminary agreement with Somalia to take a 49-percent stake in a newly-formed state petroleum firm with Indonesia's PT Medco Energy Internasional Tbk, Akbar said in a telephone interview.
"I hope we will be able to assist Somalia to become a big oil and gas producer," she said. It was too early to say what the country's potential output was, she said. Under the terms of the preliminary agreement, KEC also helped draw up the oil law and has also provided technical assistance and training, she said.
The oil law sets up a framework for production sharing agreements between international oil companies and the newly-formed state company, she said. She declined to say how the 49 percent stake in the state oil company would be divided between KEC and Medco and what investment each would make.
Details would not be finalised until the oil law was agreed by parliament, Akbar said. The law was expected to be debated this week. KEC would undertake its investment over many years, she said. Government documents obtained by Reuters indicated that the two firms would acquire their stake in Somalia Petroleum Corporation on August 31.
Somalia remains a speculative bet for exploration with no proven oil reserves, according to the US Energy Information Administration, and only 200 billion cubic feet of proven natural gas reserves.
In the 1980s, oil majors including ConocoPhillips, Chevron and Total held exploration concessions there. They left when the nation descended into chaos in 1991. Akbar said she had enlisted the Kuwaiti government's help with Somalia and that her interest in the country's development was not just commercial.
"We tried get our government to help as much as we can," she said. "Kuwait is interested in helping other Arab countries, especially those like Somalia that need help." Akbar said she is a personal friend of Somali Prime Minister Ali Gedi.
Akbar is a chemical engineer who worked for state-run Kuwait Oil Company and Kuwait Foreign Petroleum Exploration Co (KUFPEC) for 25 years before playing a role in the start up of KEC in 2005.
KEC is a small independent oil and gas exploration and production company founded in 2005. It is targeting production of 50,000 barrels of oil equivalent per day (boepd) by 2010, from 1,971 boepd at the end of last year. The company has operations in Kuwait, Egypt, Oman, Yemen, Russia and Cambodia.
KEC is one of several small private oil and gas companies that have sprung up in the Gulf Arab region eyeing potential opportunities both within the region and internationally.
They are part of a wider wave of acquisitions among Gulf Arab investors flush with cash as economies boom on record oil prices. Regional investors acquired more than $40 billion in foreign assets in the first half of 2007. KEC is 40 percent-owned by Kuwait's Global Investment House, Akbar said. Aref Investment Group owns 37 percent. A Chicago-based company owns 15 percent and the rest is with small shareholders, Akbar added.
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