is somalia the next major world oil play?

excerpt

Is Somalia the Next Major World Oil Play?
By admin | October 8, 200


Four American Petroleum Giants Had Agreements with the African Nation of Somalia for Oil Assets Before the Civil War Began. A Road to Riches Will Become Reality with Any Hint of Long Term Political and Socio-Economic Stability in the African State

Before 1990, most of the world probably thought that Kazakhstan was a fictional state in a James Bond movie. That changed when Kazakhstan became well known as an important player in the “oil rich middle eastern region�. Today, the former Soviet Republic is the 7th largest oil producing nation in the Middle East region with an estimated 30 billion barrels of oil reserves. In the early 1990’s, many astute investors played the “Kazakh� oil stocks, and share price moves of 20-100-fold were common in the early 1990’s.

There is a very good chance that the next major world oil play will be Somalia. Yes, that’s the country that’s synonymous with piracy and political turmoil, but it’s also synonymous with ‘bbl’ which stands for barrels of oil. Many savvy oil investors are starting to believe that Somalia could turn into a major oil play over the next decade.

There aren’t many ways to invest in the Somali oil industry, however, Australian Stock Exchange-listed (ASX) Range Resources Limited is a company which some would perceive as having almost unlimited upside potential. Yes, there is risk with Range Resources, but as a famous investor once said, “If I assume risk of 100% of my capital but I can make 50 times my money, those are odds I’ll play every time.� We agree. That’s the potential in Range Resources Limited.

Range Resources is dually listed on the Australian Stock Exchange ASX symbol: RRS and the London-based AIM Exchange (AIM symbol: RRL). The company has significant oil and gas potential in Puntland (Somalia), Georgia (a former Soviet Bloc) and Texas. Range Resources currently has a 20% interest in all onshore, and 100% of all offshore hydrocarbon exploration and development in the Somali state of Puntland, which covers an area of approximately 100,000km/2.

Range’s main focus is in Puntland, Somalia where it currently holds a 20% working interest in two Production Sharing Agreements (PSAs) for the Noogal and Dharoor oil and gas tenements. A recent independent review of Noogal has identified a target range of 2-10 billion barrels of oil. Seismic work during 2008 and 2009 on the Dharoor tenement has identified another large target range of oil. Range has a 20% working interest in the Noogal and Dharoor fields. TSX-Venture exchange-listed Africa Oil Corp. has a 65% interest and Raymec Metals, another company listed on the TSX Venture Exchange, has a 15% interest in the two tenements.

Range Resources also has significant interests in the former Soviet Republic of Georgia as well as a Texas oil well which is currently being drilled. If successful, the projects in Georgia and Texas could produce a significant amount of oil and gas with very favorable economies of scale. We will further explore the potential of the Georgia assets as well as the Texas assets in our next post tomorrow. However, the principal reason for owning Range Resources common stock is the world class potential of the assets in Puntland, Somalia.

In the meantime, expect results from the company’s exploration work in Somalia and Texas. With 328,000,000 shares issued and a close of $0.039 on the ASX of October 8, 2009, Range Resources is one of the best speculative – high reward plays in the resource market today.