Somali president, PM disown exploration deal with U.S. firm

Mohamed Sheikh Nor February 21, 2022

(Bloomberg) -- Somalia’s top leaders have disavowed a hydrocarbon exploration deal signed by the country’s Ministry of Petroleum and Mineral Resources with U.S.-based Coastline Exploration Ltd.

Somali Minister of Petroleum and Minerals Abdirashid Mohamed Ahmed announced on Saturday via his Twitter account the signing of seven production-sharing agreements for offshore hydrocarbon exploration that could generate millions of dollars in revenue. But shortly after, the presidential palace Villa Somalia declared the nullification of the deal, while Prime Minister Mohamed Hussein Roble issued a statement calling the agreement “illegal.”

“The alleged agreement signed by the Minister of Petroleum regarding Somalia’s oil issues is illegal and does not go through legal channels and therefore does not exist,” the statement said. “The office of the Prime Minister will take legal action in response to this act that violates national assets and the legacy of the coming generations, so as to safeguard the trust of the Somali nation.”

The development indicates a lack of coordination among different government institutions in Somalia, as the country gears up to complete much-delayed elections. In his statement, the petroleum minister thanked Villa Somalia for supporting the process leading to the agreement, which was also signed by the Somali Petroleum Authority.

An existing decree prevents government institutions and officials from entering any agreements during an election period in order to safeguard the country’s assets.

"The Presidency FGS hereby declares nullification of Petroleum pact signed by the Minister on behalf of FGS. The deal contravenes Presidential Decree 7/8/2021 which bans the inking of deals during elections so as to protect public resources from exploitation during the elections."

— Villa Somalia (@TheVillaSomalia) February 19, 2022

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