Puntland Opposes Somalia Petroleum Law and the “Illegal” Production Sharing Agreement

[Deeq A.]

Garowe (PP News Desk) — Puntland State of Somalia today issued a position paper on the Somali Petroleum Law and procedures for commercialising potential offshore oil wells. Puntland State has called attention to violations of the Provisional Constitution and provisions in Puntland State Constitution on “the natural resources of Puntland … owned by the people of Puntland, and [that] the Government of Puntland is responsible for the protection and development of its own natural resources.

Puntland State faulted the Federal Government of Somalia for failing to subject the “flawed” petroleum legislation to consultation with Federal Member States to ensure consensus on any agreement with foreign companies.

Puntland State Government position on the contracting procedures for oil drilling unveiled by the Federal Government in Mogadishu earlier this week echoed concerns expressed by the Financial Governance Committee in its report of May 2022 in which it urged the new administration “to pay special attention to oil and gas contracting” procedures.

The Somali Petrolatum Law has resulted in the signing of illegal production sharing agreement with Coastline Exploration Ltd in violation of a presidential moratorium on agreements during the transition.

Two weeks ago while on visit in Garowe President Hassan Sheikh Mohamud asked for Puntland President Said Abdullahi Deni not to raise objections to the implementation of the production sharing agreement signed by a former Petroleum Minister Abdirashid Mohamed with Coastline Exploration Ltd (formerly Soma Oil & Gas) rejected by both the former President Mohamed Abdullahi Mohamed and Prime Minister Mohamed Hussein Roble.

The Puntland State position paper on the Petrolatum Law, associated agreements and contracting procedures poses legislative challenges for the bicameral house and is likely to derail the debt forgiveness initiative for Somalia promoted expediently by Bretton Woods Institutions.

© Puntland Post, 2022

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