Now Somali Government Proposes PSAs

When American forces helped the fledging Somali government overthrow the Union of Islamic Courts earlier this year, some people argued that it was because of Al-Qaeda, others because of oil.

For years, petroleum geologists have hoped that the oil-rich geology of Saudi Arabia and the Yemen that curves graciously under the sea of Aden and reappears in Somalia, means the country is sitting on one of the world’s large untapped elephants.

Now the Somalian Prime Minister Ali Mohamed Gedi has announced that his government wants to entice the return of the international oil majors by introducing a petroleum law to provide a legal framework. “The parliament will approve the law within two months,” says Gedi.

So guess what kind of “legal framework” will be provided? It will be Production Sharing Agreements, the basis of all the controversy surrounding Iraq’s controversial Oil Law.

To get their contracts confirmed, the companies “will have to comply to the terms of concessions agreements” demanded by the law, Gedi said.

Asked whether contract holders had expressed any interest in returning, the prime minister said: “We have the information that they are interested,” but declined to give any names.