Somalia President Mohamed Abdullahi Mohamed Farmajo is poised to sign into law a new oil and gas code following weeks of debate in which lawmakers argued over fiscal terms, with several federating states distancing themselves from an exercise they claim is premature.

The Petroleum & Mineral Resources Ministry this week insisted that suitors participating in last February’s licensing exercise should submit bids by the 7 November deadline under a new legal framework that meets international standards and will transform the country.

None of the 15 offshore blocks offered include acreage currently in dispute with neighbouring Kenya, and will not be “until the settlement is reached”, according to the ministry.

The two countries await the International Court of Justice ruling over the contested demarcation of their maritime border, an altercation which last month resulted in a brief diplomatic break after Kenya mistakenly accused Somalia of offering acreage in the disputed area.

A ministerial advisory source told Upstream that all of Somalia’s federating states including the breakaway Republic of Somaliland and the semi-autonomous province of Puntland were now compliant and back the new law “and this was a remarkable achievement”.

However, other sources told Upstream that neither Somaliland nor Puntland are party to this agreement and talks to bring them onboard broke down last month and were not revived, rendering moot the impact of this week’s legislation, even with presidential assent.

The 2019 Petroleum Bill seeks to update the 2008 Petroleum Act, paving the way for completing the current round with fresh acreage awards targeted by the end of 2019, but without support or constructive input from member states, the package has little chance of implementation.

It is still possible that back channels might result in reopening talks to restore confidence in attempts by the Mogadishu administration to pass the law and attendant regulations ahead of November, despite fundamental differences of opinion over autonomy.

“Somalia is facing some serious challenges and this is one of them but we hope that something reasonable emerges from all this. What is not clear at this point is the definition of Somalia,” according to an advisory source close to the recently elected Puntland administration.

Nonetheless, Somali Minister of Petroleum Abdirashid Mohamed Ahmed praised his team for having “worked successfully with the federal member states to develop an equitable and transparent framework to develop resources for the greater good of Somalia and all its people”.

In a parallel development this week, a clutch of Somali officials bearing diplomatic passports were refused entry to Kenya upon arrival at Jomo Kenyatta Airport in Nairobi.

Those officials blocked included Somali Senators Ilyas Ali Hassan and Zamzam Dahir and Minister for Water & Energy, Osman Libah, in a move that highlighted the fragility of relations between the two nations.

Weekly

Somalia eyes new oil law despite states' doubts