The United States's largest Oil and Natural Gas Exploration Companies are rushing to strike deals with Somalia to secure oil and gas rights, which is creating discord between power-hungry political amateurs in Mogadishu.
Somalia holds billions of barrels of proven oil and natural gas reserves as of 2022, the USA and the Europeans know it and their mission is to keep China out of Somalia.
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AbyssiniaLady
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Csahlezghi
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Re: The United States is in a hurry to strike a deal with Somalia
The Somalis shouldn't be stupid enough to cuddle up to the West after all the atrocities. Rather, they should, as a matter of necessity, join Ethiopia and Eritrea economically, militarily, and security-wise and look towards China.
Re: The United States is in a hurry to strike a deal with Somalia
Csahlezghi wrote: ↑01 Mar 2022, 18:14The Somalis shouldn't be stupid enough to cuddle up to the West after all the atrocities. Rather, they should, as a matter of necessity, join Ethiopia and Eritrea economically, militarily, and security-wise and look towards China.
For us, there's a decisive prerequisite for any serious relationship with Ethiopia, leave alone joining it (and Eritrea) for economic, military, and security, etc., co-operation. This prerequisite, which is not conclusive, revolves roughly around the following:
Phase I.
* Healing the past wounds
* Settling the historical question involving the Western Region of Somalia, currently occupied by Ethiopia, which belongs to the Somali nation.
* Agreeing on well-demarcated boundary between the two countries.
Phase II.
* Building bilateral genuine diplomatic relations based on mutual respect.
Phase III.
* Building trust between the two countries and their populations.
Phase IV.
* Test such trust and observe to what extent it works.
* Nurture such trust and give it time for it to grow and develop.
Only once the above have produced satisfactory sustainable results that the two countries could then consider talking about whether they're willing to talk about whether it's in their mutual interest in furthering their relations.
See, there's a long journey to achieve before Somalia considers involving in the current infant relationship between Ethiopia and Eritrea, which is in reality nothing more than a two-men show!
In addition, make no mistake, the current good relationship between Farmajo and Abiy does not reflect at all on the relations between the two countries, which are almost non-existent. Neither does their emotional based cordial relationship translates into the relationship between the two countries.
Hope this helps shed some light on the situation.
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AbyssiniaLady
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Re: The United States is in a hurry to strike a deal with Somalia
Csahlezghi
Ethiopia, Somalia and Eritrea won’t be true allies anytime soon, but they can still work cooperatively to manage their differences effectively, As you may know, Ethiopia's relationship with Eritrea is at its lowest point since the withdrawal from Mekelle Jun 2021, Ethiopia's government and Eritrea's government have not spoken in nearly ten months.
Ethiopia is dependent on neighbouring countries ports to facilitate its trade across different parts of the world, Thus, a peaceful relations with its neighbouring countries is important for Ethiopia to rise as a regional economic powerhouse.
Ethiopia, Somalia and Eritrea won’t be true allies anytime soon, but they can still work cooperatively to manage their differences effectively, As you may know, Ethiopia's relationship with Eritrea is at its lowest point since the withdrawal from Mekelle Jun 2021, Ethiopia's government and Eritrea's government have not spoken in nearly ten months.
Ethiopia is dependent on neighbouring countries ports to facilitate its trade across different parts of the world, Thus, a peaceful relations with its neighbouring countries is important for Ethiopia to rise as a regional economic powerhouse.
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AbyssiniaLady
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Re: The United States is in a hurry to strike a deal with Somalia
U.S. Military Urges Biden to Place Commandos in Somalia as Militant Threat Worsens
Trump administration pulled out Americans who had been training Somali forces in the fight against al Qaeda affiliate
U.S. soldiers were withdrawn from bases in Somalia toward the end of President Trump’s term in office.
Photo: Tech. Sgt. Christopher Ruano/Associated Press
By Michael M. Phillips
March 10, 2022 7:20 am ET
NAIROBI, Kenya—The American military is asking President Biden to station several hundred commandos in Somalia to help blunt the spread of al Qaeda’s aggressive local affiliate, al-Shabaab, according to U.S. officials.
Military commanders want the White House to reverse then-President Donald Trump’s last-minute order to withdraw some 700 Army Green Berets, Navy SEALs and Marine Raiders from bases in Somalia, where they had been training an elite local unit to fight al-Shabaab, according to the officials. The Pentagon moved most of the American commandos to neighboring Djibouti and Kenya.
“Since U.S. forces have come out of Somalia last January, we assess there is an uptick in al-Shabaab activities,” said a senior U.S. intelligence official, adding that “there has been no pressure on al-Shabaab at this point and they have freedom of movement.”
The Pentagon considers al-Shabaab to be al Qaeda’s most-potent franchise world-wide and estimates its strength at 5,000 to 7,000 fighters. The U.S. has conducted a special-operations war against the group since 2007, much of it shielded from public view.
The military is asking Mr. Biden to deploy troops now stationed in Djibouti and Kenya back to Somalia. Senior officers argue that local soldiers fight more effectively when consistently side-by-side with experienced U.S. special-operators, even if the Americans avoid ground combat and limit their role to training and air support. Commanders also say frequent movement in and out of Somalia itself carries unnecessary risks for U.S. troops.
Read the whole article here
https://www.wsj.com/articles/u-s-milita ... 1646914851
Trump administration pulled out Americans who had been training Somali forces in the fight against al Qaeda affiliate
U.S. soldiers were withdrawn from bases in Somalia toward the end of President Trump’s term in office.
Photo: Tech. Sgt. Christopher Ruano/Associated Press
By Michael M. Phillips
March 10, 2022 7:20 am ET
NAIROBI, Kenya—The American military is asking President Biden to station several hundred commandos in Somalia to help blunt the spread of al Qaeda’s aggressive local affiliate, al-Shabaab, according to U.S. officials.
Military commanders want the White House to reverse then-President Donald Trump’s last-minute order to withdraw some 700 Army Green Berets, Navy SEALs and Marine Raiders from bases in Somalia, where they had been training an elite local unit to fight al-Shabaab, according to the officials. The Pentagon moved most of the American commandos to neighboring Djibouti and Kenya.
“Since U.S. forces have come out of Somalia last January, we assess there is an uptick in al-Shabaab activities,” said a senior U.S. intelligence official, adding that “there has been no pressure on al-Shabaab at this point and they have freedom of movement.”
The Pentagon considers al-Shabaab to be al Qaeda’s most-potent franchise world-wide and estimates its strength at 5,000 to 7,000 fighters. The U.S. has conducted a special-operations war against the group since 2007, much of it shielded from public view.
The military is asking Mr. Biden to deploy troops now stationed in Djibouti and Kenya back to Somalia. Senior officers argue that local soldiers fight more effectively when consistently side-by-side with experienced U.S. special-operators, even if the Americans avoid ground combat and limit their role to training and air support. Commanders also say frequent movement in and out of Somalia itself carries unnecessary risks for U.S. troops.
Read the whole article here
https://www.wsj.com/articles/u-s-milita ... 1646914851
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AbyssiniaLady
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Re: The United States is in a hurry to strike a deal with Somalia
The spread of al-Shabaab is just a pretext for the United States to scare off China state owned companies from sourcing critical raw materials from Somalia, the USA would want to destabilize Somalia.
Somalia is not a superpower but the USA is simply obsessed with Somalia, George H. W. Bush send more than 40,000 troops in 1992 to Somalia, along with 20,000 soldiers from other western nations.
Somalia is not a superpower but the USA is simply obsessed with Somalia, George H. W. Bush send more than 40,000 troops in 1992 to Somalia, along with 20,000 soldiers from other western nations.
Re: The United States is in a hurry to strike a deal with Somalia
i don't agree with thatAbyssiniaLady wrote: ↑10 Mar 2022, 16:28The spread of al-Shabaab is just a pretext for the United States to scare off China state owned companies from sourcing critical raw materials from Somalia, the USA would want to destabilize Somalia.
Somalia is not a superpower but the USA is simply obsessed with Somalia, George H. W. Bush send more than 40,000 troops in 1992 to Somalia, along with 20,000 soldiers from other western nations.
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AbyssiniaLady
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Re: The United States is in a hurry to strike a deal with Somalia
Somali Government, US Company Dispute Legality of Oil Deal
April 19, 2022 8:12
The Somali government and a U.S. company are locked in a dispute over the validity of an oil exploration agreement reached in February in Istanbul.
Abdirashid Mohamed Ahmed, Somalia's minister of petroleum and mineral resources, and Richard Anderson, chief executive officer of Coastline Exploration Ltd., signed the agreement. But in separate statements, Somali President Mohamed Abdullahi Mohamed, known as Farmaajo, and Prime Minister Mohamed Hussein Roble rejected the deal, declaring it "null and void."
Both leaders cited government decrees and directives banning all ministries and government agencies from signing agreements with foreign governments and organizations until ongoing parliamentary elections are finalized. The elections are expected to conclude next month with the election of a new president.
In addition, the government has instructed Attorney General Suleiman Mohamed Mohamud to investigate the contract and take appropriate legal measures.
The government's position is that the agreement is in contravention of a presidential decree dated August 7, 2021, and a Council of Ministers directive on December 6, 2018. The mandate of the current legislative and executive branches expired more than a year ago. The government said correct procedures have not been followed; therefore, the agreement is "null and void," according to a February 21 letter sent by the Foreign Affairs Ministry to Coastline Exploration and obtained by VOA.
Anderson disagrees with the letter and disputes the government's interpretation of the legality of the agreement.
"I won't go into the legal details of the analysis, but we believe quite firmly that our PSAs (production-sharing agreements) we signed are legally valid and that they're in full effect," he said in an interview.
VOA asked Anderson why the company ignored the Somali president's decree and a letter from a joint parliamentary committee on natural resources that instruct government agencies not to enter agreements during the election period.
"We did not ignore anything," Anderson said. "Before we signed the PSAs in February, we consulted with the ministry and with the SPA (Somali Petroleum Authority), and we were assured that both the president and PM were aware of the process and they were fine with the signing."
He admitted Coastline Exploration did not directly communicate with either the president or the prime minister, but said the minister of petroleum and members of the SPA assured them that both leaders were aware of it. Ahmed, the petroleum minister, refused repeated VOA requests for an interview for this report.
In an interview with VOA in February, Ahmed said the president knew about the signing, but the presidential palace denied his claim.
Agreement details
Providing details of the agreement for the first time, Anderson said it was a "fair deal" for Somalia.
"There is a 5% royalty that comes right off the top. Profit is split 50-50. There is a 30% income tax on whatever profits the contractor — i.e., Coastline — makes," he said. There are various other financial benefits for Somalia in the agreement, he added.
According to Anderson, all the terms of the PSAs, including the profit-sharing percentage, are fixed for its 30-year term and will not change during the life of the contract.
Somali oil experts criticized the agreement. Jamal Kassim Mursal, former permanent secretary of the Somali Petroleum Ministry, said the agreement was "unfair."
"A fixed oil royalty rate of 5% and a fixed gas royalty rate of 3%, government share becomes 59.8%," he said. "However, if prices fall to $70 a barrel, government share stands at 50%. Any price below $70, government loses money to the contractor. Sixty dollars a barrel, government share becomes just 42%."
Mursal said other key terms such as the discount rate, the R-factor (ratio of cumulative revenues to cumulative costs), the cost recovery ceiling, the exploration period and capital gains determine the overall government take.
"So, we cannot say it's fair," Mursal said.
"The fact that all was done in secret itself makes it unfair. Current government term has ended, and the two statements from the office of PM and president stated no government official signs a contract up until new government is installed. So they do not have a mandate to sign such a deal."
Last year, the Somali government was warned of entering oil agreements by the Financial Governance Committee (FGC), a group of experts comprising the Somali Finance Minister, parliamentarians and a member of the World Bank.
In an advisory, the FGC said it identified two main concerns in the government's approach to oil and gas contracts: incomplete compliance with the government's legal framework, and inadequate protection of the state's financial interests.
"Incomplete compliance significantly raises the risk of future legal and/or compensation claims against FGS (Federal Government of Somalia), while inadequate protection of FGS's financial interests risks poor value for money over the lifetime of awards that may last for 40 years or more," said the advisory obtained by VOA. The signed agreement was for 30 years.
The FGC also said no PSAs should be signed until an extractives industries income tax is enacted. No such law has been enacted in Somalia.
Coastline Exploration, founded in 2018, has contractual possession of Soma Oil & Gas, a company that collected seismic data off Somalia's shore.
Soma Oil & Gas was previously investigated by the United Kingdom's Serious Fraud Office but was later cleared of wrongdoing because of "insufficient evidence." Some of the board members of Soma Oil & Gas, including Anderson and Alexander Djaparidze, a Russian billionaire, are board members of Coastline Exploration.
"I want to tell everybody upfront that we are not corrupt. We don't need to be corrupt," Anderson said. "No Somali government official has ever asked me to make any kind of illegal payment. It has never happened. I would also like to stress that no Somali politician is a shareholder of Coastline. We are independent of the government."
He confirmed that Coastline paid for the flights to Istanbul and hotels for members of the Somali delegation, who flew to Turkey to sign the agreement.
"I want to make very clear before we do anything and pay anything that has anything to do with anybody in the government of Somalia, it's always reviewed by our anti-bribery and corruption council before we make any such payments or any such commitments," Anderson said.
"This was reviewed by them, and they determined that it was, you know, that it was fine under U.S. law and under Somali law, again out of convenience."
Anderson said he was confident that the investigation by the Somali attorney general would find that Coastline had complied with Somali law, and that Coastline would be cleared to start work.
https://www.voanews.com/a/somali-govern ... 36605.html
April 19, 2022 8:12
The Somali government and a U.S. company are locked in a dispute over the validity of an oil exploration agreement reached in February in Istanbul.
Abdirashid Mohamed Ahmed, Somalia's minister of petroleum and mineral resources, and Richard Anderson, chief executive officer of Coastline Exploration Ltd., signed the agreement. But in separate statements, Somali President Mohamed Abdullahi Mohamed, known as Farmaajo, and Prime Minister Mohamed Hussein Roble rejected the deal, declaring it "null and void."
Both leaders cited government decrees and directives banning all ministries and government agencies from signing agreements with foreign governments and organizations until ongoing parliamentary elections are finalized. The elections are expected to conclude next month with the election of a new president.
In addition, the government has instructed Attorney General Suleiman Mohamed Mohamud to investigate the contract and take appropriate legal measures.
The government's position is that the agreement is in contravention of a presidential decree dated August 7, 2021, and a Council of Ministers directive on December 6, 2018. The mandate of the current legislative and executive branches expired more than a year ago. The government said correct procedures have not been followed; therefore, the agreement is "null and void," according to a February 21 letter sent by the Foreign Affairs Ministry to Coastline Exploration and obtained by VOA.
Anderson disagrees with the letter and disputes the government's interpretation of the legality of the agreement.
"I won't go into the legal details of the analysis, but we believe quite firmly that our PSAs (production-sharing agreements) we signed are legally valid and that they're in full effect," he said in an interview.
VOA asked Anderson why the company ignored the Somali president's decree and a letter from a joint parliamentary committee on natural resources that instruct government agencies not to enter agreements during the election period.
"We did not ignore anything," Anderson said. "Before we signed the PSAs in February, we consulted with the ministry and with the SPA (Somali Petroleum Authority), and we were assured that both the president and PM were aware of the process and they were fine with the signing."
He admitted Coastline Exploration did not directly communicate with either the president or the prime minister, but said the minister of petroleum and members of the SPA assured them that both leaders were aware of it. Ahmed, the petroleum minister, refused repeated VOA requests for an interview for this report.
In an interview with VOA in February, Ahmed said the president knew about the signing, but the presidential palace denied his claim.
Agreement details
Providing details of the agreement for the first time, Anderson said it was a "fair deal" for Somalia.
"There is a 5% royalty that comes right off the top. Profit is split 50-50. There is a 30% income tax on whatever profits the contractor — i.e., Coastline — makes," he said. There are various other financial benefits for Somalia in the agreement, he added.
According to Anderson, all the terms of the PSAs, including the profit-sharing percentage, are fixed for its 30-year term and will not change during the life of the contract.
Somali oil experts criticized the agreement. Jamal Kassim Mursal, former permanent secretary of the Somali Petroleum Ministry, said the agreement was "unfair."
"A fixed oil royalty rate of 5% and a fixed gas royalty rate of 3%, government share becomes 59.8%," he said. "However, if prices fall to $70 a barrel, government share stands at 50%. Any price below $70, government loses money to the contractor. Sixty dollars a barrel, government share becomes just 42%."
Mursal said other key terms such as the discount rate, the R-factor (ratio of cumulative revenues to cumulative costs), the cost recovery ceiling, the exploration period and capital gains determine the overall government take.
"So, we cannot say it's fair," Mursal said.
"The fact that all was done in secret itself makes it unfair. Current government term has ended, and the two statements from the office of PM and president stated no government official signs a contract up until new government is installed. So they do not have a mandate to sign such a deal."
Last year, the Somali government was warned of entering oil agreements by the Financial Governance Committee (FGC), a group of experts comprising the Somali Finance Minister, parliamentarians and a member of the World Bank.
In an advisory, the FGC said it identified two main concerns in the government's approach to oil and gas contracts: incomplete compliance with the government's legal framework, and inadequate protection of the state's financial interests.
"Incomplete compliance significantly raises the risk of future legal and/or compensation claims against FGS (Federal Government of Somalia), while inadequate protection of FGS's financial interests risks poor value for money over the lifetime of awards that may last for 40 years or more," said the advisory obtained by VOA. The signed agreement was for 30 years.
The FGC also said no PSAs should be signed until an extractives industries income tax is enacted. No such law has been enacted in Somalia.
Coastline Exploration, founded in 2018, has contractual possession of Soma Oil & Gas, a company that collected seismic data off Somalia's shore.
Soma Oil & Gas was previously investigated by the United Kingdom's Serious Fraud Office but was later cleared of wrongdoing because of "insufficient evidence." Some of the board members of Soma Oil & Gas, including Anderson and Alexander Djaparidze, a Russian billionaire, are board members of Coastline Exploration.
"I want to tell everybody upfront that we are not corrupt. We don't need to be corrupt," Anderson said. "No Somali government official has ever asked me to make any kind of illegal payment. It has never happened. I would also like to stress that no Somali politician is a shareholder of Coastline. We are independent of the government."
He confirmed that Coastline paid for the flights to Istanbul and hotels for members of the Somali delegation, who flew to Turkey to sign the agreement.
"I want to make very clear before we do anything and pay anything that has anything to do with anybody in the government of Somalia, it's always reviewed by our anti-bribery and corruption council before we make any such payments or any such commitments," Anderson said.
"This was reviewed by them, and they determined that it was, you know, that it was fine under U.S. law and under Somali law, again out of convenience."
Anderson said he was confident that the investigation by the Somali attorney general would find that Coastline had complied with Somali law, and that Coastline would be cleared to start work.
https://www.voanews.com/a/somali-govern ... 36605.html
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AbyssiniaLady
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Re: The United States is in a hurry to strike a deal with Somalia
Somalia Petroleum Authority Pushes Back on Voice of America Reporting
Friday, April 22, 2022
The Somalia Petroleum Authority (“SPA”) notes the article published by Voice of America on 19 April and issues the following response.
The analysis published in the article was entirely inaccurate and based on an early draft of the Production Sharing Agreement (PSA), which is no longer relevant.
The facts, which provide an equitable framework for both parties, are as follows:
Background
The Resource Sharing Agreement signed on 5th June, 2018 mandated the establishment of the Somali Petroleum Authority (SPA), nominated by the Federal Government States. The SPA’s objective is to review exploration and production agreements with international petroleum companies to ensure they are internationally competitive and also serve the best interests of the Somali people.
In addition, the Resource Sharing Agreement and subsequent Petroleum Law require that PSAs must be approved by Government ministries and the Inter-Ministerial Concessions Committee (“IMCC”) as being fair and equitable. The IMCC is an intergovernmental body charged with scrutinizing such agreements with representatives from the Ministry of Finance and other stakeholders including the Ministry of Justice and Judiciary Affairs, Ministry of Commerce and Industries, Ministry of Planning and Ministry of Foreign Affairs.
The IMCC recommended certain modifications to the Coastline PSAs in October 2021. These modifications were negotiated among the Ministry of Petroleum and Mineral Resources, SPA and Coastline in January of 2022.
https://www.petroleumafrica.com/somalia ... -reporting
Friday, April 22, 2022
The Somalia Petroleum Authority (“SPA”) notes the article published by Voice of America on 19 April and issues the following response.
The analysis published in the article was entirely inaccurate and based on an early draft of the Production Sharing Agreement (PSA), which is no longer relevant.
The facts, which provide an equitable framework for both parties, are as follows:
- The royalty rate is fixed at 5%
- Throughout the commercial lifecycle of a project, normally 20 to 25 years, the profit split is set at 50-50 between Somalia and the oil company, regardless of the commercial price of oil
- Somalia’s share never dips below 50%, even if oil prices fall below $55 per barrel
- If the price of a barrel of oil falls below $55, the oil company will reduce its share so Somalia’s share in fact increases in these circumstances
- During the cost recovery phase, normally the first 5 years, the terms of the PSA allow the company to recoup the costs of exploration
- If no oil is discovered then the oil company has no recourse to recover the costs of exploration, ensuring that there is no material risk to Somalia and its people
- Furthermore, Somalia will benefit from corporate tax at 30% and capital gains tax at 20%
Background
The Resource Sharing Agreement signed on 5th June, 2018 mandated the establishment of the Somali Petroleum Authority (SPA), nominated by the Federal Government States. The SPA’s objective is to review exploration and production agreements with international petroleum companies to ensure they are internationally competitive and also serve the best interests of the Somali people.
In addition, the Resource Sharing Agreement and subsequent Petroleum Law require that PSAs must be approved by Government ministries and the Inter-Ministerial Concessions Committee (“IMCC”) as being fair and equitable. The IMCC is an intergovernmental body charged with scrutinizing such agreements with representatives from the Ministry of Finance and other stakeholders including the Ministry of Justice and Judiciary Affairs, Ministry of Commerce and Industries, Ministry of Planning and Ministry of Foreign Affairs.
The IMCC recommended certain modifications to the Coastline PSAs in October 2021. These modifications were negotiated among the Ministry of Petroleum and Mineral Resources, SPA and Coastline in January of 2022.
https://www.petroleumafrica.com/somalia ... -reporting