Somaliland defended its right to award oil exploration licenses, after Somalia’s government declared Genel Energy Plc’s operations there illegal.

Somaliland unilaterally declared independence in 1991, but isn’t recognized as a sovereign state by any other nation. Somalia, which claims dominion over the territory, announced on Dec. 28 that it rejects UK-based Genel Energy’s claim to petroleum rights in the area.

“The government has the authority to engage foreign investors in order to explore and exploit the Republic of Somaliland’s potential hydrocarbons and mineral resources,” Somaliland’s Ministry of Energy & Minerals said in a Dec. 29 statement. “No one other than the Somaliland government has the authority to claim or award an exploration license within Somaliland.”

Genel Energy was awarded an exploration license for two onshore blocks in Somaliland in August 2012 and acquired a 50% participating interest in the Odewayne Production Sharing Agreement that covers three additional blocks in November that year, according to its website. Genel Energy’s main production assets are in Iraq’s Kurdistan region.

Bloomberg

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