Australia-based Jacka Resources plans to start oil exploration in Somaliland, a region of Somalia that declared itself independent in 1991. Nice work if you can get it.
Imagine a particularly challenging country in which to do business.
Let's say it’s a country that is not recognized by any other country, so all business has to be conducted either in off-shore accounts or in cash. On land, militant groups fight against the government and take the occasional foreign aid worker hostage. At sea, pirates attack and capture freighters, tankers, and even pleasure boats. Most food in the local economy comes from foreign donations, because the region is prone to conflict and famine.
Would you invest in such a country?
Australia’s Jacka Resources gas and oil exploration company would. And if you guessed that the country is Somalia, you’re very close. The country is Somaliland, which declared itself independent from Somalia in 1991, and has remained a functioning, but unrecognized, independent republic ever since. Much safer and more stable than its eastern and southern neighbor, Somaliland also sits in a geological zone where oil is likely to occur, and it recently awarded its first oil concessions to foreign oil prospecting companies.
Jacka Resources – which has also successfully explored oil in Uganda’s Lake Albert – will begin seismic tests, gravity tests, and exploratory drilling soon in the 22,000 square kilometer Habra Garhajis block in southwestern Somaliland, where oil has been found to seep to the surface in at least nine separate locations.