Former Tory leader spearheads Somalia oil deal

Somalia’s government has signed an oil and gas exploration deal with a newly formed British company, the first such agreement by a central government in Somalia. The deal with Soma Oil and Gas allows the company to conduct seismic surveys in Somalia’s territorial waters and in limited onshore regions.

The former leader of Britain’s Conservative party, Michael Howard, spearheaded the oil deal with the new government of Somalia, a country destroyed by two decade of civil wars, widespread piracy, and terrorism.

Lord Howard only joined Soma Oil and Gas as a non-executive chairman three months ago: he sided the deal in Somalia’s capital, Mogadishu, during his first visit there on Tuesday.

The Financial Times reports that interest in oil and gas exploration along the east African coast has surged after commercial quantities of oil were discovered in Kenya and Uganda along with gas in Tanzania and Mozambique further south, which sent many explorers into high-risk nearby prospective areas including Somalia. UN investigators said in a report this year that inconsistencies in the legal framework regulating oil “risk exacerbating clan divisions and therefore threaten peace and security”.

Soma are planning to put armed guards on board ships in an effort to defend against Somali pirates who have previously commandeered vessels.

Abdirizak Omar Mohamed, minister for natural resources in Mogadishu, said the agreement stipulated Soma could apply for up to 12 oil blocks in return for undertaking the survey and handing over the data to the government, according to the Financial Times. Mr Abdirizak had previously said that Somalia could not sign any energy deal until the petroleum bill and the new constitution were made compatible, but that stance has now been abandoned.

Read full article at: http://www.ft.com/cms/s/0/0a9e0f74-febe-11e2-b9b0-00144feabdc0.html#axzz2bI5OVEi0

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One thought on “Former Tory leader spearheads Somalia oil deal

  1. Pingback: Somalia deal raises concerns about oil risks | theoilandgasworld

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