Range, which has 50.1% of the oil and minerals rights in the semi-autonomous Somali state, said the farm-in agreement was made following meetings with the state-owned oil major in the Middle East last week.

Under the deal, KNOC will pay a $A13.43 million sign-on fee, and spend at least $33.25 million on exploration over two years to earn a 75% interest in the Noogal Area, which comprises a portion of the former Blocks 28 and 89, according to Range.

The Melbourne-based company said it believed the agreement was a major step towards its goal of attracting international partners to help it explore and develop Puntland’s mineral and hydrocarbon assets.

If KNOC proceeds with the deal, which is subject to due diligence and a formal agreement, Range will hold the residual 25% interest, with joint venture partner Consort Private then acquiring 12.5%.

Range has recently been forced to defend its presence in Puntland, after Somali news reports claimed more than 10 people had died and others were injured when fights broke out between a native group and Puntland soldiers who were protecting a team of the company’s researchers.

Executive chairman Mike Povey dismissed the reports as “highly exaggerated”, saying no one had died as a result of Range’s exploration in the region.

Somalia has not seen any oil and gas exploration since civil war broke out in the country in the late 1980s. Range Resources said it believed the area had all the pre-requisites to become a major oil-producing province, while its other mineral potential was largely unexplored.