http://www.reuters.com/article/2014/10/24/somalia-oil-idUSL6N0SI3QV20141024
Somalia says reviewing oil deals U.N. says lack transparency
2:04pm EDT
* Somalia says oil exploration key to country's future
* U.N. investigators say oil contracts lack transparency
* Oil deals from two decades ago on hold due to war
By Drazen Jorgic and Louis Charbonneau
<
http://blogs.reuters.com/search/journalist.php?edition=us&n=louis.charbonneau&>
NAIROBI/UNITED NATIONS, Oct 24 (Reuters) - Somalia said it was reviewing
several oil and gas deals that U.N. investigators say lack transparency
and risk hindering development of the country's energy industry.
Energy firms are cautiously eyeing Somalia's long coastline, an untapped
frontier on the east African seaboard that has become an exploration hot
spot after big gas finds in Mozambique and Tanzania. Somalia's southern
neighbour Kenya has found oil.
The Somalia-Eritrea Monitoring Group (SEMG), an eight-member panel of
investigators that monitors compliance with U.N. sanctions, said
Mogadishu had signed a series of contracts and cooperation agreements
that "highlighted transparency and accountability issues" in state
petroleum institutions.
In a report, the monitors said such deals were "likely to exacerbate
legal tensions and ownership disputes and stunt the transparent
development of Somalia's oil and gas sectors".
Mohamed Keynan, director of communication in the president's office,
said Somalia was reviewing several contracts with the help of the
Financial Governance Committee (FGC), comprising three Somali members
and three donors, including representatives from the World Bank and
International Monetary Fund.
"The Federal Government of Somalia (FGS) will take appropriate action,
based on the advice of the FGC," Keynan said in a statement sent to
Reuters. "However, it is wrong to assume that all contracts in place
with the FGS are in some way flawed."
About a dozen companies, including oil and gas majors, had licenses to
explore Somalia before 1991, the year a conflict erupted that tore the
nation apart for the next two decades, involving clans and Islamist
militants.
The breakaway territory of Somaliland, semi-autonomous Puntland and
other regional authorities in the fractured nation have granted their
own licences for some of the same blocks.
Western diplomats have said the government's limited capacity and
experience in negotiating often complex energy and other deals could
mean Somalia received a poor return. Donors have also been unnerved by
earlier U.N. reports that cited cases of government corruption, charges
Mogadishu denies.
EFFORTS APPRECIATED
In the latest report, U.N. monitors said a deal with London-based Soma
Oil and Gas had "never been made public, nor was it approved by the
Federal Parliament of Somalia".
Lawmakers have in the past challenged contracts that they said
parliament had not been given the chance to scrutinise.
Soma Oil said "the broad terms" of the deal were made public and said it
had invested about $37 million on a programme to gather and digitalise
old seismic information and collect new offshore data.
The firm, chaired by former senior British politician Michael Howard,
said it was not operating in disputed regions but was focusing on deep
water areas offshore. It said its work had encouraged other firms to
discuss restarting activities.
"The efforts of companies such as Soma Oil and Gas are both essential
and greatly appreciated," said Keynan, adding Somalia was recovering
from war and could not do such work itself.
The monitors said the federal government was in talks with firms such as
Shell, Exxon Mobil Corp and BP , to revive contracts which were put
under force majeure in 1991 when the civil war broke out.
They said "such negotiations are premature and could spark conflict,
especially since they have not been conducted in consultation with
regional authorities who may be affected".
Shell said it had no comment on such political issues, and BP denied it
was in talks with Mogadishu on blocks where it declared force majeure in
1991. Exxon did not immediately respond to requests for comment.
Petroleum Minister Daud Mohamed Omar said on Monday that Somalia wanted
oil output to start in six years. (Additional reporting by Edmund Blair
<
http://blogs.reuters.com/search/journalist.php?edition=us&n=edmund.blair&>
in Nairobi; editing by Edith Honan
<
http://blogs.reuters.com/search/journalist.php?edition=us&n=edith.honan&>
and Emelia Sithole-Matarise)
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-------- Original Message --------
Subject: (Reuters)Somalia says reviewing oil deals U.N. says lack
transparency
Date: Fri, 24 Oct 2014 11:38:16 -0700
From: Semere Asmelash
Reply-To: Semere Asmelash
To: dehai_at_dehai.org <dehai_at_dehai.org>
Somalia says reviewing oil deals U.N. says lack transparency
Fri Oct 24, 2014 2:04pm EDT
http://www.reuters.com/article/2014/10/24/somalia-oil-idUSL6N0SI3QV20141024
Received on Fri Oct 24 2014 - 14:47:15 EDT