The self-declared republic of Somaliland has confirmed that oil has been discovered in the Sallahey area of Marodi-Jeh region, its ministry of energy and mineral resources said in a statement posted on Facebook.
The ministry said it had launched scientific investigations after a black liquid spilled from a water well drilling site in the area, and the results had confirmed the oil discovery.
This is the first confirmed oil discovery in the area.
The statement added that UK firm Genel Energy would start further oil exploration and production.
The discovery comes two weeks after the Somali federal government warned Genel Energy against oil exploration in Somaliland without authorization from Mogadishu, saying the firm was undermining its sovereignty.
Somaliland, which declared independence from the south in 1991 and has since been, unsuccessfully seeking international recognition, said the statement from Mogadishu was meaningless.