Canada-based explorer Africa Energy will withdraw from a production-sharing agreement (PSA) in Somalia's semi-autonomous Puntland region, effective immediately.
The company cited the uncertain political climate, especially in respect of disagreements between the government of Somalia and the regional government of Puntland over the legitimacy of PSAs, and potential territorial claims on the Nugaal block.
Africa Energy's joint-venture partners in the PSA, London-listed Range Resources and Dutch-based explorer Red Emperor Resources, have acknowledged that political uncertainties had prevented activities required under the PSA for the past three years.
Somalia's breakaway regions of Somaliland and Puntland have bypassed Mogadishu in awarding their own exploration licences. International oil companies such as Shell, BP, US independent ConocoPhillips and Italy's Eni previously held concessions in Somalia, but withdrew during the country's descent into civil war in 1990 and did not return.
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