In the world’s frantic race for energy dominance, the small, unrecognized African territory of Somaliland is quietly stepping onto the stage, holding what could be one of the continent’s last major oil frontiers. Beneath the dust and rugged terrain of Somaliland lies a potential goldmine — not of gold itself, but of black gold: oil. And if the early estimates are anything to go by, this could transform the geopolitical and economic fortunes of a region that has, for decades, been politically adrift and economically fragile.
In 2020, TGS, the respected Norwegian seismic survey company, delivered a report that should have turned more global heads than it did. According to TGS, the Somali basin — which covers both offshore and parts of the onshore territories including Somaliland — likely holds offshore reserves of about 30 billion barrels of oil. The onshore reserves, while less consistently assessed, are not insignificant either.
Somaliland’s Hidden Wealth
The very mention of “30 billion barrels” instantly evokes visions of Dubai’s meteoric rise or the transformation of Saudi Arabia from desert lands into sprawling cities of opulence. Yet, Somaliland’s narrative is far more complex. It declared independence from Somalia in 1991 following the collapse of the Somali government but has not been internationally recognized as a sovereign state. This political limbo has kept Somaliland out of major global investment conversations. And yet, paradoxically, this might have preserved its oil riches from the reckless exploitation that has characterized resource extraction in many African nations.
For Somaliland, oil represents more than just economic potential — it symbolizes political leverage, autonomy, and survival. A stable, oil-producing Somaliland could recalibrate international relationships and force a new conversation about its statehood.
The Challenges Beneath the Surface
But it’s not as simple as drilling and declaring prosperity. The story of oil discoveries in Africa is littered with cautionary tales. From Nigeria’s Delta region — where oil wealth fed corruption, environmental degradation, and insurgency — to Angola’s failed promise of equitable wealth distribution, African oil has too often deepened poverty rather than alleviated it.
Somaliland must confront these realities head-on. It must avoid what economists grimly call the “resource curse,” where instead of catalyzing growth, natural wealth breeds misgovernance, conflict, and economic distortion.
Moreover, there are practical hurdles. Exploration and extraction require billions in investment, state-of-the-art technology, and secure environments for multinational companies. Somaliland’s lack of international recognition complicates the signing of legally binding contracts with global majors. Although some mid-tier companies like Genel Energy have been willing to take calculated risks, scaling up to industrial-level production will demand a broader coalition of investors and insurers willing to bet on Somaliland’s stability.
Lessons in Governance: A Hopeful Sign
Here, however, Somaliland offers a glimmer of hope that sets it apart from many failed oil states. Despite its lack of international recognition, Somaliland has maintained remarkable internal stability for over three decades. It holds regular elections, has a functioning government, and boasts a democratic spirit rare in the Horn of Africa. This governance maturity could serve as a critical bulwark against the usual oil curse scenarios.
If Somaliland can remain internally cohesive, maintain transparent management of oil revenues, and invest profits into diversifying its economy — especially infrastructure, education, and technology — it stands a fighting chance of avoiding the pitfalls that have trapped others.
Imagine a scenario where Somaliland uses its oil revenues not to build vanity projects or fund corrupt patronage networks, but to become the “Singapore of the Horn of Africa” — a trade, finance, and logistics hub connecting Africa to the Middle East and beyond. Such a future is possible — but only if leadership remains visionary, disciplined, and fiercely patriotic.
The Geopolitical Quake
The oil factor introduces unavoidable geopolitical tremors. Somalia, which considers Somaliland an integral part of its sovereign territory, will almost certainly contest any unilateral oil production. Neighboring countries, seeing a wealthy Somaliland on the horizon, could be tempted either to interfere or forge new alliances. Major powers — especially China, the United States, and Gulf nations — will see in Somaliland either a threat to manage or an opportunity to exploit.
In a world increasingly polarized between the West and rising Eurasian powers, Somaliland’s oil could make it a pawn in a larger chess game. That, again, demands astute, savvy leadership — leaders who can play a multi-vector foreign policy game, courting investors without becoming captives to any single power bloc.
The Climate Imperative
Finally, there is the unavoidable elephant in the room: climate change. The 2020s are not the 1970s. Global momentum toward renewable energy is irreversible. Investment in oil and gas is increasingly scrutinized, and the window for hydrocarbon-based economic miracles is closing. Somaliland must act swiftly. If it waits too long, it risks being left with unexploited reserves in a world that no longer wants them.
That means rapid, responsible development — using early oil revenues not to double down on fossil fuels but to invest in the transition economy: solar power, hydrogen, clean manufacturing, and sustainable urbanization.
A Fork in the Road
Today, Somaliland stands at a historic fork in the road. One path leads to prosperity, recognition, and a meaningful place in the world’s economic and diplomatic corridors. The other path — paved with greed, shortsightedness, and weak institutions — leads to the same sorry fate that has befallen too many resource-rich African nations.
The next five to ten years will decide which road Somaliland takes. Oil is a blessing only when matched with wisdom. The black gold beneath Somaliland’s soil could indeed turn it into a prosperous African nation — but prosperity is not found in the barrel alone. It is found in the boardroom, the parliament, and the hearts and minds of a people willing to imagine a future bigger than themselves.
The oil is real. The potential is immense. The question is: will Somaliland rise to the moment, or will it squander its once-in-a-century chance at greatness?
Time, as always, will tell.
https://goachronicle.com/could-oil-turn-somaliland-into-a-prosperous-african-nation/