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12th April
2021
written by Tellus

The outstanding issues concern: (a) whether the law respects the principle of federalism in the Provisional Constitution or whether it centralizes control of the oil sector within the central administration of the federal government; (b) and, in this context, the management and terms of the Resource Sharing Agreement (RSA); (c) the tax and tax system; (d) the Production Distribution Agreement (EPI) and its management; (e) and the implementation and control of the regulatory authority, the Somalia Petroleum Agency (SPA). For the final results of this study, an analysis of these issues will be developed. In 2013, the United Nations called for a moratorium on oil deals and said that without a legal and regulatory framework for the sharing of energy resources, the United Nations could stoke violence and corruption in a country still facing clan tensions and an Islamist insurgency. The report states that Mr. Hassan suggested in emails that Soma`s contractual agreements with the government could be reviewed, both in the past and in the future, in the absence of financial “support.” But that means that there seems to be an acceptance of the fact that the law has been made now, and it is the details of the establishment of the institutions themselves and the strengthening of their capacities that are important, but especially in the short term, that will be in the checkpoints. This is particularly important for the BSG – and the Somalia Petroleum Company (SONOCO) – because the people who control these institutions will have a significant influence on future oil licensing, contracting, agreements and industry regulation. If supervisory and supervisory institutions such as the General Auditorium, parliamentary committees and the judiciary are not significantly strengthened, they could have considerable influence and power to manipulate the flow of oil resources – and thus influence the political market. “Why not sign the amendment and come back, because I`m sure it will protect the agreement.” But in reality, UN investigators claim that the system appears to have been used to “finance systematic payments to senior departmental officials, some of whom ” have played decisively both secure the company`s original contract and negotiate subsequent agreements.” In May 2015, the company proposed an agreement that could provide up to 90% of Somalia`s oil revenues. A draft production-sharing agreement indicates that the government`s share of revenues on the first 25,000 barrels (4,000 m3) of oil per day is 10% if found at a depth of more than 1,000 m and when oil costs less than $70 per barrel (440 DOLLARS/m3). If production exceeds 150,000 barrels (24,000 m3), Somalia`s share reaches 30%. According to Soma Oil and Gas, the proposals discussed are in line with industry standards.

[7] In a statement, it was said: “No person who has or is still involved in the capacity-building programme has been or is in a position to influence the decision to grant trade agreements in favour of Soma.” The first major attempt to launch an oil licensing cycle in 2018/19 has been delayed due to objections from the opposition, public opinion, the FMS, MPs and within the FGS itself.

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