By: Yusuf M Hasan
Somalilandsun – can the Somali extractive sector be developed at the nascent stages of the development of a constitution, and legal, federal and regulatory frameworks? Will developing the EI sector strengthen or destabilize the federal state? What are the costs of action in this sector, versus the costs of inaction? And what measures are viable in the short-term, whilst supporting longer-term and ‘good-enough’ institutional and economic transformation?
This and other questions that have raised an outcry in Mogadishu and recommendations on the way forward are contained in a leaked Report by Adam Smith International’s study on the extractive industries in Somalia.
On Somaliland the ASI study that collected its data from various government departments says
“From a regional perspective the geology of Somaliland shows many similarities with Yemen and the exploration has focused on searching for Jurassic rifts where source-rocks have accumulated.
Since 2009, Somaliland has garnered some interest with small companies like Genel, Ophir Energy, Prime Resources, Asante Oil and DNO signing agreements with the Ministry of Energy & Minerals. But so far it is understood that only Genel and DNO have signed Production Sharing Agreements. These are built around the Mining Code that dates back to 1984. Somaliland had to call on international expertise to draft a hydrocarbon law and to provide support in PSA negotiations.”
The company Adam Smith International (ASI) produced the report in March funded by the British government, entitled Needs Assessment for the Development of Somalia’s Extractive Industries having been given the task of producing this study last year after President Hassan Sheikh Mohamud asked the British government for technical support.
Though president Mahmud expected that the report would conclude in the necessity of providing aid to the federal government in various relevant areas (such as geophysics, engineering, law, accounting and interpreting data) and also for negotiating with the oil majors it has instead produced an outcry of unimaginable magnitude in Mogadishu
Read the complete and Leaked 88 page report in PDF