Somalia will not accept oil moratorium, says Finance Minister

Somalia will not accept a moratorium on oil deals as proposed by the United Nations in its Monitoring Report yet to be released, Finance minister Mohamed Adan has said.

The Minister said the decision to proceed with oil exploration lies with Somalia and therefore it will be upon Somalia to decide what is best for the country.

“It’s a sovereign issue,” Adan told reporters Friday in the Kenyan capital, Nairobi. “We will not welcome a blanket oil moratorium.”

A leaked UN Monitoring Group for Eritrea and Somalia, UNMGES, report set to be released mid this month called for a moratorium on oil exploration in Somalia citing lack of a legal regulatory framework in the country.

The report which took issue with the manner in which the government signed an oil deal with the UK based Soma Oil and Gas Holdings also prompted the UK Serious Fraud Office to investigate Soma Oil for alleged corruption.

However the Minister said the government is developing a revenue sharing regime to ensure the oil proceeds benefit the country and will commence oil extraction when the framework is in place.

“We will not go ahead with any profit-sharing arrangement without the proper legislation and policy framework,” Adan said.

The World Bank is advising Somalia to put regulations in place to ensure oil resources benefit its citizens, Bella Bird, the Washington-based lender’s director for Somalia, said in an interview.

“The government has set up a mechanism called the financial governance committee which is reviewing concessions, that’s a very important innovation,” she said.

Soma Oil which says had spent $40 million conducting surveys off the Horn of Africa nation’s coast, has asked the British government to help block the proposal.