Peace has broken out after years of acrimony between Somalia’s federal government and member states, with a working accord on revenue sharing and a majority of International Monetary Fund (IMF) members pledging debt relief.
The disbursement and distribution of $1.7 million in back-payment of major oil company surface rentals to the federating states is an extraordinary achievement after 30 years of civil conflict, as is the decision by 100 IMF member states to forgive some $330 million of festering sovereign debt.
New-found confidence in Somalia’s efforts to establish a stable and transparent administration is evident in the “co-created roadmap” announced this week by Petroleum Minister Abdirashid Mohamed Ahmed, in which Shell and ExxonMobil accepted the possibility of converting concessions into production sharing contracts under the 2019 Petroleum Act.
Subsidiaries Shell EP and Mobil Exploration in joint venture hold five offshore blocks in the Indian Ocean shallows but declared force majeure when civil war erupted in 1990, joining the onshore exodus of Chevron, Amoco, Conoco, Phillips Petroleum and Lundin Oil.
Upstream understands from the supermajors that a “constructive dialogue” is underway while both companies “continue to monitor the security and operating environment in and surrounding Somalia.”
Precisely what conditions have been imposed on this generous act of multilateral debt alleviation remain unknown, nor have the restive Somali provinces seen fit to comment.
Just last month, the autonomous province of Puntland bemoaned the lack of a proper constitutional framework, castigated the regime of President Mohamed Abdullahi Farmajo and insisted oil companies should hold off.
What, then, is the context of this supposed rapprochement? Militias loyal to Puntland and the breakaway Republic of Somaliland skirmished this week over the disputed gas-rich territory of Sanaag, while federal forces clashed again with Jubbaland militia in the south, sending civilians fleeing into neighbouring Kenya.
Federal Petroleum Minister Ahmed is nonetheless adamant that these accords “give us confidence to further explore our hydrocarbon potential”.
Though whether sweetness and light really has descended upon this war-torn land remains to be seen.
