Tuesday January 5, 2021
MOGADISHU (HOL) - Opposition presidential candidates in Somalia have written to a US oil firm warning it not to enter into a deal with the outgoing administration adding no such agreement will not be enforceable.
A day after it revealed the Federal Government was intent on signing an oil contract with Liberty Oil and Coastline Exploration, both US oil companies, the Council of Presidential Candidates (CPC) filed another letter to Liberty urging it to hold its horses.
“The ongoing licensing process conducted by the Ministry of Petroleum and Natural Resources is not compliant with the legal framework of the Federal Government of Somalia, and thus unlawful for any company to Participate,” the letter dated January 3 read in part.
The CPC which brings together 14 presidential candidates raised two legal contentions in arguing against the planned contract signing. First, the CPC said, the planned signing was inconsistent with the Public Procurement Act (2016) which provides for Inter-Ministerial Concessions Committee (IMC) oversight of such contracts.
“It is a requirement for the IMCC to review and approve all licensing round tender documentation, including the Model PSA, before a licensing round being launched. This was not done.”
Secondly, CPC said, ‘the fiscal terms of the Model Production Sharing Agreement (PSA) are inconsistent with the Extractives Industries Income Tax Bill currently with the Parliament for approval.
The CPC which includes two former presidents noted that these legal frameworks are intended to protect both the investor and the interests of the Somali people in awarding petroleum contracts.
“We will therefore advise you not to sign any oil blocks deals with the Somali authorities for the time being, as they will not be enforceable,” the CPC warned.