Lord Howard and oil company he chairs face new questions after second report emerges into Somali payments
The former Conservative leader Lord Howard and the oil company he chairs are facing fresh questions after a second report emerged into payments in Somalia.
The Serious Fraud Office launched an investigation into Soma Oil & Gas, which is searching for oil in the war-torn country.
The SFO probe came after a leaked United Nations monitoring group report queried payments the company had made to the Somali government.
Now a separate report, commissioned by the Somali administration, has claimed some of the arrangements – including the fact Soma paid a lawyer who was advising the Somali government – created a conflict of interest.
The report, which has been obtained by The Wall Street Journal, also criticised the company for a deal that it said was ‘so poorly written and one sided that Somalia would receive only a fraction of the oil revenue it could have received via an average modern oil contract’. Soma dismissed the report, which was written by Abdulhaliim Abdurahman, a legal adviser to the Somali oil ministry, saying it has ‘no credibility’.
A company spokesman said: ‘It is concerning that the monitoring group appears to have been influenced by it. The report’s author, Mr Abdurahman, is an immigration lawyer based in the United States with no oil and gas or international commercial law experience.
‘His lack of experience is reflected in the quality of the report which contains clear errors and misleading statements.
‘The current oil minister no longer uses Mr Abdurahman and has retained an international oil and gas specialist firm to ensure the interests of the Somali people are safe-guarded to the fullest extent.’
The Abdurahman report questioned Soma’s payments of more than £350,000 made to Canadian lawyer Jay Park, who was acting as an adviser to the Somali government and queried whether he could have advised both Soma and the government.
Soma said it has now commissioned its own report into the leaked documents and said it is concerned about the UN monitoring group’s approach.
The UN monitoring group also accused the company of creating ‘a serious conflict of interest, in a number of cases appearing to fund systematic payoffs to senior ministerial officials.’
Howard last week wrote a letter to the UN Security Council claiming the monitoring group had ‘fundamentally misunderstood the nature, purpose and destination of payments’.
He argued the arrangements – known as capacity building agreements – were normal in the oil and gas sector where a country did not have the expertise to extract resources itself.
Somalia’s ministry of petroleum and mineral resources said the monitoring group’ s description of payments to officials was ‘simply inaccurate and misleading.’
Soma has said that the SFO probe throws ‘no suspicion whatsoever’ on Howard.
The company was founded in London in 2013 by a group of investors including tycoon and Tory donor Basil Shiblaq. Michael Howard joined later that year.