Petroleum Africa
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Tuesday, June 19, 2018
Somalia’s Ministry of Petroleum and Mineral Resources has drafted regulations to manage the country’s petroleum and mineral resources sectors, especially in regard to ownership and revenue sharing. The agreement was made by the federal government in cooperation with the federal member states of the National Security Council and facilitated and assisted by the World Bank and the Council for Inter-State Cooperation.
The agreement wraps up a three-year process led by the ministry to create a framework for the development of the oil industry, and it authorizes the Ministry to issue permits and manage the petroleum and mining activities in Somalia.
The Council for Inter-state Cooperation, a technical committee from the Federal Member States and the Federal Government led an intensive and inclusive consultation process with all industry stakeholders. The President of Somalia, Mohamed Abdullahi Mohamed, as well as Prime Minister Hassan Ali Khayre and the Heads of the Federal Member States and the Mayor of Mogadishu also secured high-level political agreement on the principles that will guide the management of the sectors.
“The finalization of this agreement marks a new chapter in the progress and development of the Federal Republic of Somalia,” said Abdirashid Mohamed Ahmed, the Minister of Petroleum and Mineral Resources. “The Ministry will work in close collaboration with the federal member states in swiftly implementing all legislations and policies, monitoring and following up on all licenses issued prior to this agreement.”
The agreement is based on the Provisional Constitution of Somalia, which states the allocation of natural resources should be agreed by both the federal government and the federal member states; and that land shall be used in an “equitable, efficient, productive and sustainable manner.”
The objectives of the agreement are to gain a common vision between the government and the states on the management of the petroleum and mining sectors in Somalia; to clarify the management and administration of petroleum and mineral resources in Somalia; to provide a framework through with both the government and the states can participate in the exploration and production of resources; to obtain revenue from the exploration and production of these resources; and to reduce economic inequality between the federal member states of Somalia.
According to Minister Ahmed, the agreement will enable the country to avoid conflicts over resources and embark on a route to sustainable development.
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