Soma Agreement Somalia: What You Need to Know

The Soma Agreement, also known as the Soma Oil and Gas Exploration Agreement, is a controversial contract signed between the Somali government and Soma Oil and Gas, a UK-based company, in August 2013. The agreement grants Soma Oil and Gas exclusive rights to explore and exploit hydrocarbons in Somalia`s offshore waters for 30 years. However, the agreement has been criticized for being opaque, unfair, and potentially damaging to Somalia`s fragile state-building process.

Background

Somalia is located in the Horn of Africa and has been plagued by conflict and instability for decades. The country has been without a central government since 1991 and has experienced multiple civil wars, piracy, terrorism, and human rights abuses. Somalia also has significant oil and gas reserves, estimated at 30 billion barrels of oil and 100 trillion cubic feet of natural gas offshore. The exploration and exploitation of these resources have been seen as a potential source of revenue and development for the country.

In 2012, the Somali government passed a new Petroleum Law, which established a legal framework for the oil and gas sector and created the Somali Petroleum Authority (SPA) to regulate and oversee exploration and production activities. In 2013, the government signed the Soma Agreement with Soma Oil and Gas, which was founded by former Conservative Party leader Michael Howard and backed by several prominent investors, including Lord Rothschild and Tony Hayward, the former CEO of BP.

Controversy

The Soma Agreement has been criticized by some as being a secretive deal that gives Soma Oil and Gas exclusive access to Somalia`s oil and gas reserves without proper consultation with local communities or transparency about the terms of the contract. In particular, there have been concerns about the potential impact of oil and gas exploration on the environment and local livelihoods, as well as the equitable sharing of revenue and benefits with the Somali people.

In 2015, the UK Serious Fraud Office (SFO) launched an investigation into allegations of bribery and corruption involving Soma Oil and Gas and senior Somali officials. The investigation was prompted by leaked documents that suggested the company had paid millions of dollars to secure the Soma Agreement and had made improper payments to Somali officials. Soma Oil and Gas denied any wrongdoing and claimed that the leaked documents were part of a smear campaign against the company.

Outcome

The Soma Agreement has been suspended since 2015, pending the outcome of the SFO investigation. In 2019, the SFO announced that it had dropped the investigation due to a lack of evidence of criminality. However, the controversy surrounding the Soma Agreement has not gone away, and there are ongoing debates in Somalia and internationally about the future of the country`s oil and gas sector and the role of foreign companies in its development.

Conclusion

The Soma Agreement is an example of the challenges and complexities of oil and gas exploration in fragile and conflict-affected states. While the potential benefits of such resources can be significant, there are also risks and trade-offs that need to be carefully managed. It is important for governments, companies, and civil society to work together to ensure that oil and gas activities are conducted in a transparent, accountable, and sustainable manner that benefits the people of Somalia.