Somalia - We are really excited about the ACA Block and the NI 51-101 report by Chapman Petroleum Engineering. The figures are fantastic - prospective oil resources of 21 million barrels and 130 billion standard cubic feet of sales gas (Bscf) in the ACA Block. Given that these figures are based on pre-1991 data, we think the reality is even better.
The ACA Block has an interesting history, it was drilled by Sinclair Oil and then ARCO with oil found as early as 1960. The wells were capped since Somalia was not in production mode. The socialist government nationalized the entire block in 1979 and started its own drilling program with World Bank backing. Before production could begin the civil war broke out and the Petroleum Ministry went up in flames. Our ACA block partner, Amsas, CEO is Dr Ali Abdullahi who was petroleum consultant to the Somali government and picked up the block in 2008 and inked a deal with Kilimanjaro last year.
Our job is to be the catalyst to get the exploration plan rolling this year. We are negotiating with a security firm, seismic and drilling companies and asking the World Bank to resume its former position as financier. The block is 51% owned by the Somali Federal Government and is in a strategic area next to the capital Mogadishu.
I can tell you that we are actively working on finance, seismic and yes - drilling partners.
My personal opinion is that this block is just the beginning for Kilimanjaro in Somalia. Big oil is headed back to Somalia and Shell has claims on a bordering offshore block to ours. Oil can help revitalize the Somali economy and Somalia can also become a major gas producer. The ACA Block also includes all the mineral rights which oil companies often ignore but not us - this is something we are looking into as I write this. Further the agreement with the Somali government allows first refusal on up to an additional three more blocks. Somalia is our top priority and we will have rapid fire deals in the coming months.
