Somalia is taking steps to attract foreign investment to its energy sector but challenges remain, most notably in how the federal government can integrate its policies with those of the state governments.
The UK Serious Fraud Office told Soma Oil & Gas Holdings Ltd. in August it had found "insufficient evidence of criminality" in its probe of possible illegal payments to Somali officials, according to a letter cited in a London court judgment.
Soma Oil & Gas has called for a meeting with the United Nations (UN) to discuss allegations regarding its dealings in Somalia. The move comes after the company became the subject of a criminal investigation by the Serious Fraud Office (SFO) in relation to alleged corruption. Soma, which is chaired by former Conservative Party leader Michael Howard, wants to arrange talks with UN Security Council Committee chairman Rafael Dario Ramirez Carreno.
Searching for oil off the coast of one of the world’s most dangerous and corrupt countries was always going to be difficult for Soma Oil and Gas Ltd. Now its work in Somalia is being scrutinized by the UK’s Serious Fraud Office. On July 31, the SFO raided Soma’s London office as part of its investigation into almost $500,000 worth of payments to Somali officials. Soma, funded by Russian billionaire Alexander Djaparidze and headed by former UK Conservative Party leader Michael Howard, says it’s done nothing wrong and is cooperating with the inquiry. Soma has “always conducted its business in a completely lawful and ethical manner” in trying to develop the country’s first oil reserves, it said in a statement Aug. 3. The SFO has confirmed “no suspicion whatsoever attaches to Lord Howard,” Soma said AugUST 1. Djaparidze didn’t respond to Bloomberg requests seeking comment. Soma began working more than two years ago in Somalia, where al-Qaeda-linked militants have waged an insurgency since 2006. The country hasn’t had a functioning central administration since civil war erupted almost a quarter of a century ago. It also ranks alongside North Korea as the world’s most graft-ridden nation, according to Transparency International, the Berlin-based watchdog.
Soma Oil and Gas could be granted licensing award by the government in Mogadishu after carrying out seismic work with no security issues. The company said results are expected to be published at the end of the year. Following the outbreak of civil war in Somalia in 1991 the area had not previously been suitable for exploration.