UK’s Serious Fraud Office investigating oil firm Soma

Britain’s Serious Fraud Office (SFO) has launched a criminal investigation into the British exploration firm Soma Oil and Gas, which has been searching for oil in Somalia.

The SFO did not outline the corruption allegations against the company, whose London headquarters were searched on Wednesday.

The United Nations last year called for a moratorium on any new exploration deals in Somalia, warning such agreements could fuel tensions and potentially spark new conflicts as rivals fight for resources in the fragile Horn of Africa nation.

“The SFO confirmed today that it has opened a criminal investigation into SOMA Oil & Gas … in relation to allegations of corruption in Somalia,” the SFO said in a statement on Friday.

Capacity Building Agreement

Soma said it was “confident that there is no basis to the allegation” and was co-operating with the SFO.

“Soma Oil & Gas has always conducted its activities in a completely lawful and ethical manner and expects this matter to be resolved in the near future,” the company said in a statement on Saturday.

A diplomatic source in Nairobi told Reuters the United Nations Monitoring Group for Somalia had also been investigating Soma, focusing on its “Capacity Building Agreement” with the oil ministry.

In a presentation to oil investors in April, Soma said that agreement would see the British company “support salaries for ministry staff and experts, and (… provide a) contribution towards office equipment and outfitting”.

Somali government

Ibrahim Hussein, head of external relations for the Ministry of Petroleum, said the Somali government would continue working with Soma until the investigation was concluded.

“If the (investigation) outcome is positive – nothing wrong – then the Soma Oil and Somali government relationship and cooperation will continue. If there is any wrongdoing (proven), then that’s another case,” he said.

Hussein added that the oil ministry has been cooperating with the U.N. Monitoring Group during their investigations, but there had been no contact with the SFO yet.

Somalia has been ravaged by warfare between warlords and competing clans since a civil war broke out in 1991.

An insurgency by al Qaeda-aligned al Shabaab militants, who carry out frequent attacks in the capital and beyond, has meant change has been slow despite the presence of African Union peacekeepers and huge inflows of cash from Western donors.

Soma in 2013 secured an exclusive contract to conduct seismic surveys on 12 offshore oil and gas blocks, totalling 60,000 square kilometres. The contract awarded Soma the right to subsequently pick other blocks it wanted to exploit.

Seismic information

The company last year said it had invested $37 million as part of a programme to gather and digitalise old seismic information and collect new offshore data.

Abdirizak Omar Mohamed, Somalia’s security minister who signed that deal in 2013 when he was the country’s resources minister, said the SFO investigation had come as a surprise.

“It was a fair deal for Somalia. I don’t know how the investigation came about or what kind of corruption we are talking about,” he told Reuters.

Soma is chaired by Michael Howard, a member of Britain’s House of Lords and British Prime Minister David Cameron’s predecessor as Conservative party leader.

“The SFO have confirmed that no suspicion whatsoever attaches to Lord Howard arising from the business of SOMA and his role as a non-executive director of the company and he has agreed to speak with the SFO to help resolve their enquiry as quickly as possible,” a Soma spokesman told Reuters.

Howard was not available for immediate comment.

Reuters