Somalia’s president and prime minister have clashed with the country’s petroleum minister over the alleged signing of production sharing agreements with a little-known US exploration company covering a huge swathe of promising maritime acreage off the war-torn country.
On 19 February, Houston-based Coastline Exploration surprised the industry by saying it had signed seven PSAs, a move the company said enables it “to proceed with plans to explore for oil and gas on the many prospects and leads identified in these offshore blocks”.
Villa Somalia tweeted that: “The presidency declares nullification of (the) petroleum pact signed by the minister on behalf of the Federal Government of Somalia (FGS).”
The presidency was referring to the Minister of Petroleum & Mines, Abdirashid Mohamed Ahmed.
“I thank the President of FGS for supporting the process and encouraging us to complete this task,” stated his twitter account.
Nevertheless, the presidency pointed out: “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.”
Farmajo’s stance was backed by his Prime Minister Mohamed Hussein Roble who said: “The alleged production sharing agreement purportedly signed by the Minister of Petroleum with a foreign entity regarding Somali oil reserves is illegal (and) unacceptable since it wasn’t done through legal avenues.”
“I will take all appropriate measures to protect our national resources,” he added.
“The government of Somalia and the Ministry of Petroleum have spent a great deal of time and effort to ensure the country has the proper legal and administrative infrastructure to support oil and gas exploration with the passing of the Petroleum Law, adoption of the Revenue Sharing Agreement among the federal government and its members states and the establishment of the Somali Petroleum Authority to provide continuing support for the anticipated growth in the sector.”
UIrich said the PSA negotiations were “rigorous,” adding that “the way is now open for other oil and gas companies to join us in our quest for commercial discoveries through the current licensing round and, also through direct negotiations with the Somali oil and gas authorities.”
Somalia’s first licensing round opened in August 2020 and was due to close in June 2021 but was extended to an unspecified date.
The country’s hydrocarbon potential is well-known in industry, exemplified by Shell and ExxonMobil signing an agreement in 2020 with the authorities to convert their legacy exploration blocks into updated PSAs.
Ulrich is also chairman elect of Ireland-headquartered Discover Petroleum which operates a huge swathe of licences west if the Comoro Islands — adjacent to the huge Rovuma basin gas discoveries in Mozambique — and previously headed the now defunct London-listed Sterling Energy, which held assets in Madagascar.
Among Anderson’s previous roles before founding Coastline in 2018 were director and chief financial officer of Eurasia Drilling Company.
Coastline’s two non-executive board members are Simon Ayat, executive vice president and chief financial officer of Schlumberger until January 2020, and Alexander Djaparidze, a founder of Eurasia Drilling Company in 2002 and its current chief executive.