Somalia’s Parliament upper house earlier this week approved a new petroleum legislation, aimed at providing a regulatory framework that has been lacking and overall attract major international companies which exited the country over three decades ago.
The new law will above all establish revenue sharing between the Somalia National Government and other states besides providing a legal guideline to the industry.
Speaking following the passing of the new law Somalia’s minister of petroleum and mineral resources Abdirashid Mohamed Ahmed termed the event as a major step for the country’s upstream sector.
“This is a major step forward for Somalia and its people as the petroleum law is approved by the upper house and moves closer to completing its legislative process,” Abdirashid Mohamed Ahmed, the Minister of Petroleum and Mineral Resources, said in a statement on Monday.
Following the passing of the new law it will need to be assented signed by the president before it can come into effect.
This comes even as the country plans its first ever oil and gas licensing round off the country’s coastline following the completion of 2D seismic acquisition carried out by SeaBird Exploration and concluded in June 2014 with over 20,500 km lines of 2D seismic data having been acquired across a 114,000 sq km offshore evaluation area.
Under a seismic option agreement with Ministry of Petroleum & Mineral Resources, Federal Government of Somalia Soma oil and gas is now set to benefit from blocks with an area of up to 60,000 sq km under.
The new licensing has been a source of disagreement between Somalia and its southern neighbor Kenya with Nairobi terming the action as “unparalleled affront and illegal grab at the resources of Kenya… and tantamount to an act of aggression against the people of Kenya and its resources.” Kenya claimed some of the blocks up for auction fall within the contested blocks between the two countries with a suit by Mogadishu already at the International Court of Justice.
At home the Upper House’s national resource committee in a statement termed the summit unconstitutional and against the law warning that any auction could have “extremely serious consequences” given the country lacks a petroleum law and regulations.