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Kenya Expects to Resolve Somalia Maritime Border Dispute

Oct. 30 (Bloomberg) -- Kenya, East Africa’s largest economy, expects to resolve a maritime border dispute with Somalia to expand oil and gas exploration in the area.

Kenya lodged a claim with the United Nations for the boundary to run parallel with lines of latitude in the Indian Ocean, said the energy ministry’s senior geologist Felix Mutunguti. Somalia is ready to negotiate, said the country’s National Resources Minister Abdirizak Omar Mohamed.

It should be a similar border as “with Tanzania to the south coast,” Mutunguti said today in an interview in Nairobi. “Our friends in Somalia may have contrary thoughts, but that is in the process of being resolved.”

Kenya, which has attracted explorers including France’s Total SA and Anadarko Petroleum Corp. of the U.S., is headed to become the first oil exporter in East Africa. The dispute with its unstable neighbor has delayed exploration, and could sour relations and even lead to war, according to Kim Moss, a Perth, Australia-based analyst at Future Directions International.

“It’s actually not a disputed area from our perspective,” Mohamed said. “Somalia is ready to start dialogue with Kenya” and “resolve it in a peaceful way.”

Kenya last year ended talks with Norway’s Statoil ASA over rights to explore the L25 Block in the Indian Ocean, which is bordering Eni SpA’s and Total’s acreage in the nation’s northern waters. That permit along with L26 are open for bidding next year, Mutunguti said.

Kenya this year created a security force to protect oil exploration sites in the inland areas bordering Somalia and Ethiopia. In September, Somalia-based Islamist group al-Shabaab infiltrated the border and attacked the Westgate Mall in Nairobi, killing at least 67 people.

“The subsurface is very, very appealing,” said Osman Shahenshah, the chief executive officer at Afren Plc, whose company has 80 percent in Kenyan Block 1 bordering Somalia and Ethiopia. “Obviously the postcode is challenging.”

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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