Somalia President, PM disown oil deal with U.S. firm

 

Somali President Mohamed Abdullahi Farmaajo and Prime Minister Mohamed Hussein Roble have publicly rejected a deal signed by the Petroleum Ministry and an U.S. firm.

On Saturday, Petroleum Minister Abdirashid Mohamed Ahmed announced that Somalia had signed a production sharing agreement with Coastline Exploration Ltd, a US firm in Texas, to begin work on seven offshore oil blocks.

Villa Somalia rejected the deal moments after it was announced, saying it violates the presidential decree that banned engagements and pacts with foreign entities during election time.

However later in a statement, the ministry clarified that the accord is to “launch the exploration” for hydrocarbons in offshore Somalia.

According to the statement, the accord with Coastline, an upstream oil and gas company focused on East Africa but based in Texas, is the result of recently completed seismic programs – studies on the potential of the oil or natural gas presence.

If the production agreement sails through, Somalia has the potential to become a significant oil and gas producing country.