Somalia represents one of the last truly unexplored oil frontiers globally, albeit highly prospective, with only one offshore well and nothing in deep water along its vast coastline.

The preliminary plan of oil and gas sector started late 1956, The mid of 60 St.Clair entered MOU with the Somali government. Oil exploration in the Somali inhabited territories that dates back to 1948 when the US oil major Sinclair Oil Corporation followed by Agip (today ENI) and Conoco began exploration drillings and subsequently discovered eight sedimentary basins.

The politics of Somalia takes place in a framework of federal parliamentary representative democratic republic. According to the Constitution of Somalia, the President of Somalia is head of state, and Prime Minister as head of government who is appointed by the President with the parliament's approval.

The Somali Petroleum Act was drafted in 2008 and ratified in 2019 after the resource sharing agreement was signed in Baidawa between FG and FMS. The federal President of Somalia, Mohamed Abdullahi Farmajo signed it on January 2020 after both lower house and upper house passed the Act.