Turkey sets up mechanism to explore oil, gas and mining opportunities in Somalia

[Deeq A.]

The Turkish government is moving to exploit oil, gas and mining prospects in Somalia by establishing a mechanism that will allow both private and state-owned companies to explore energy opportunities in the country, which is strategically located in the Horn of Africa.

A memorandum of understanding (MoU) between Turkey and Somalia on comprehensive energy and mining cooperation signed in 2016 was approved by the Foreign Affairs Committee of the Turkish parliament a week after President Recep Tayyip Erdoğan issued a statement on an invitation by the Somali government to conduct drilling and exploration operations off its coasts.

According to the text of the agreement, obtained by Nordic Monitor, the Turkey-Somalia energy cooperation MOU will focus on projects for the exploration, production and refining of hydrocarbons; natural gas processing, storage, transportation, marketing and distribution; geosciences and reservoir engineering; petrochemical and derived products; and the development and maintenance of infrastructure and associated technologies with regards to the hydrocarbons.

The first article states that the MoU aims to “establish a comprehensive cooperation and sets out certain principles for cooperation between the Parties in the fields of energy and mining, with the purpose of developing and promoting the sectors of petroleum, gas, electricity, mineral and mining, as well as petro-chemistry.”

President Erdoğan said last month that Somalia had invited Turkey to conduct drilling and exploration operations in its waters. “We had an offer from Somalia. They said Somalia has oil in its waters. [They said] that just like in Libya, [we] could conduct the same [drilling operations] in [Somalia],” Erdoğan told journalists on the presidential plane returning from a conference on Libya in Berlin on January 19, 2020. “There are steps we’ll take there. This is something beneficial for us,” he underlined.

Erdoğan’s remarks came after the Somali parliament’s approval of a new petroleum law, which aims to provide a regulatory framework that will help to attract investment in exploration by major oil companies, upon which President Erdoğan’s ruling Justice and Development Party (AKP) accelerated the parliamentary approval process for the Turkey-Somalia energy cooperation agreement. Recent developments and the text of the agreement reveal how Turkey plans to follow up on Somalia’s offer.

The MoU was signed on June 3, 2016 in Mogadishu by Turkish Foreign Minister Mevlüt Çavuşoğlu and Somali Foreign Affairs and Investment Promotion Minister Abdusalam H. Omar during President Erdoğan’s official visit to the African country.

The deal also covers the exchange of information and experience on the development of the energy sector and its legal framework, including contractual processes related to hydrocarbon and mining activities; training of human resources; supporting joint seminars, conferences and exhibitions aimed at attracting investment; and implementing specific projects in order to ensure energy supply security.

Article 5 states that the parties should encourage “private and state-owned companies to invest in the energy and mining sectors in both countries,” adding that they will support “private and state-owned companies to establish joint ventures and/or companies which would operate in the energy and mining sectors in both countries.”

Moreover, the agreement aims to promote cooperation through mining projects in the areas of prospecting, exploration, development, construction, operation and production. The 12-article agreement was submitted to parliament for ratification on January 25, 2019 by President Erdoğan.

According to the deal, the parties will form energy and mining working groups to jointly develop cooperation plans in accordance with Article 6. Both sides will appoint officials to act as their representatives in the working groups, and the agenda and objectives of the meetings will be decided by these experts.

Furthermore, the deal sets forth conditions on the handling of classified information produced or provided under the agreement, specifying how it will be transmitted, used and disclosed.

 The terms of the agreement will be executed by the Ministry of Energy and Natural Resources on the Turkish side and the Ministry of Petroleum and Mineral Resources for Somalia. The deal is valid for five years with automatic renewal. According to the agreement, either party may notify the other of the intent to terminate at least six months in advance.

Somalia is not an oil producer, but studies conducted by Seismic Geo and other companies have pointed to considerable oil and gas resources in its maritime territory. The Somali petroleum and mineral resources ministry announced last October that the country would open 15 blocks for oil companies to bid on for exploration and production licenses.

Turkey has built a strong relationship with Somalia since 2011, when it began providing the country with humanitarian aid to tackle a famine. Turkey has sought to increase its influence while initiating development projects, opening schools and training Somali soldiers as part of efforts to build up the war-torn country’s army. In the last decade it has built a military base in the capital, and Erdoğan-linked companies run both Aden Adde International Airport in Mogadishu and the port.

According to some experts, the energy and mining cooperation deal will open up the waters off the Somali coast to Turkey’s drilling vessels and President Erdoğan’s energy giants.

Source: Nordic Monitor