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BusinessSomalia

Somalia: Oil deal canned hours after it was signed

Kieran Burke
February 20, 2022

Both the Somalian president and the country's prime minister have rejected the oil exploration deal inked by one of the ministers. The leaders said they are protecting the country's national resources.

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Somalia Präsident Mohamed Abdullahi Mohamed
Somalian President Mohamed Abdullahi Mohamed opposes the deal with the US-based Coastline ExplorationImage: Vladimir Smirnov/TASS/imago images

Somalia's leadership has made a swift reversal on an oil exploration deal signed with a US company. On Saturday, the Minister of Petroleum and Mineral Resources, Abdirashid Mohamed Ahmed announced that production sharing agreements had been signed with US-based firm, Coastline Exploration Ltd.

Ahmed said in a statement that the deal was "a huge moment" for the people of Somalia.

"Recently completed seismic programs indicate that Somalia has the potential to become a significant oil and gas producing country," he said in a statement. The deal would "accelerate our roadmap of hydrocarbon exploration offshore."

"We are pleased to announce that we have signed 7 Production Sharing Agreements with COASTLINE EXPLORATION LTD. It is a victory for the Somali people," the minister said in a tweet.

Same day cancelation

But with the ink barely dry, both Somalia's president and prime minister announced the deal was off.

In a statement, the office of President Mohamed Abdullahi Mohamed said the deal was nullified. The presidential palace Villa Somalia tweeted that "it contravenes Presidential Decree 7/8/2021 which bans the inking of deals during elections so as to protect public resources from exploitation during elections."

The office of the presidency and the prime minister have a strained relationship but, in this instance, both leaders appear to have been on the same page.

Prime Minister Mohamed Hussein Roble called the agreement "illegal" and "unacceptable" and said in a Tweet: "I will take all appropriate measures to protect our national resources."

Somalia's bumpy road to elections

The Horn of Africa nation is gearing up for long-overdue elections, scheduled for February 25. The road to the vote has been fraught with violent attacks and political tensions.

In December, President Mohamed suspended the powers of the prime minister over allegations of the latter being "linked with corruption." The country is also facing Islamist attacks, with an al-Shabab suicide bomber  detonating a device in the town Beledweyne and killing at least 14 people.

The AFP news agency contributed to this report.

Edited by Darko Janjevic.