The Ministry of Petroleum and Mineral Resources is pleased to report that the prospects for petroleum exploration in Somalia are very encouraging.
Somalia continues to recover at a rapid pace and investors are realising its potentiality. The Federal Government of Somalia (FGS) welcomes this development.
Recovery from 25 years of conflict is not an overnight endeavour. The legislative and governmental environment must be completely re-built. Whilst economic recovery is vital to stability, the FGS recognises that this must be pursued transparently, incrementally and equitably.
“The natural resource sector of Somalia will contribute strongly to building domestic revenue options for the FGS. The oil and gas sector has received significant interest, but we are not about to rush into any deals that may compromise the Federal Government’s ability to use any income generated to its own advantage,” Minister Mohamed Mukhtar Ibrahim commented.
“The Ministry is working closely with the African Legal Support Facility, a unit of the African Development Bank, to develop fiscal and legal processes to support petroleum exploration and production. Recent reports that would suggest we are leaping into deals with our eyes shut are unfounded,” the Minister said.
Furthermore, regional outreach initiative to develop a shared vision for the development and management of the Somali petroleum sector is in progress. The regional engagement will facilitate the development of ‘a revenue sharing mechanism’ between the Federal Government and the Regional Member States, which is also essential for the development of PSA model.
The FSG has not signed a single Production Sharing Agreement (PSA) with any petroleum company. However, prospective companies can send their own proposals to the Federal Government.
“It is important for everyone, and particular for the Somali people, to recognize that private entities can propose anything they want to us. We welcome their initiative. But, let me clear, 100% of our resources are in our hands. Future decisions will be made in a manner that is transparent, accountable and ensure a fair deal to the Somali people now and in the future,” the Minister concluded.