Somalia’s controversial oil deal with a US oil firm last week is raising suspicions in Nairobi amid an unresolved maritime border dispute between the two countries.
On February 19, Somalia’s Petroleum and Mineral Resources Minister Abdirashid Ahmed announced the signing of seven production-sharing agreements (PSAs) with Coastline Exploration, a US company co-founded by a Russian oligarch and based in Houston, Texas, which says it is “focused on the East African oil scene,” to proceed with plans to explore the oil and gas potential of the many prospects and leads identified in its offshore blocks.
Protest deal
But immediately after the announcement the country’s top leadership — the president, the prime minister and the auditor-general — declared the deal null and illegal.
President Mohammed Abdullahi Farmaajo said the move violated a presidential decree issued in 2021 banning engagements with outside entities during election time. Prime Minister Mohamed Hussein Roble said procurement laws had been flouted, a stance taken by the auditor-general as well.
But it was not just the Somalia leadership that was rattled by the agreements. In Nairobi, officials told The EastAfrican they were “concerned” about Somalia giving out exploration contracts for resources in an area whose ownership is still in dispute. A top-ranking diplomat, who declined to be quoted, said that while Kenya was not alarmed, it was watching the developments in Mogadishu.
