Somali cabinet okays Petroleum Sharing Agreement ahead of Oil Week in Dubai

GOOBJOOG NEWS|MOGADISHU: The Inter-Ministerial Committee on Contracts (IMCC) has approved the Petroleum Sharing Agreement (PSA) ahead of the gathering of oil producing countries as from tomorrow in Dubai.

The sub-committee endorsed the PSA which has been subjected to revision following concerns that the earlier PSAs did not give the country a better deal.

Petroleum Minister Engineer Abdirashid Ahmed hailed the endorsement of the document as crucial in Somalia’s quest to explore its oil resources.

“It is an important step that will definitely play a role in our efforts to explore and utilize our resources, for the benefit of our nation,” said Ahmed.The approval of the PSA comes on the eve of the Africa Oil Week 2021 which kicks off tomorrow in Dubai.

Engineer Ahmed will be among the key note speakers.

The new PSA is anchored on the Petroleum Amendment Act signed into law by outoing President Mohamed Farmaajo. The law which is amendment of the 2008 version nullifies all oil contracts signed in Somalia between 1990 and 2012.

“All petroleum agreements signed with administrations in parts of Somalia, or the Transitional Federal Institutions from December 1990 to September 2012, are invalid,” article 9 (1) of the Act reads.

Somalia was supposed to start the licensing of oil companies in January 2020 but that timeline was not met.