SOMALI NATIONAL PETROLEUM POLICY
GOAL AND MISSION
The policy goal is to use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society.
To effectively and prudently administer, monitor and regulate the petroleum sector.
PETROLEUM POLICY OBJECTIVES
The overall objective of the petroleum policy is to ensure sustainable, adequate, affordable, competitive, secure and reliable supply of petroleum products to meet national needs at least cost, while protecting and conserving the environment. Specifically these are to:
- Utilize petroleum revenue as a tool to accelerate economic empowerment for the Federal and Federal Member State Governments as well as urban and rural development.
- Improve access to affordable, competitive, and reliable petroleum energy services.
- Provide an environment conducive for the development and provision of petroleum services.
- Prioritise and promote the development of local technologies in oil and gas exploration and development.
- Ensure that prudent environmental, social, health and safety considerations, as well as issues of climate change are factored in petroleum sector developments.
- Ensure that a comprehensive, integrated and well informed petroleum sector plan is put in place for effective development.
- Foster international co-operation in petroleum trade, investments and development.
- Promote capacity building in the sector through research, development and training. Also promote local manufacture of plant, equipment, appliances and materials.
- Promote appropriate standards, codes of practice and specifications for equipment, systems and processes in the sector.
- Promote diversification of energy supply sources to ensure security of supply.
- Promote cost effective and equitable pricing of petroleum products.
- Protect investor, producer, supplier, consumer and other stakeholder interests.
- Provide incentives for local and international investments in the petroleum sector.
- Ensure that investors and operators in the petroleum sector comply with local content requirements.Promote and develop government owned agencies in the development of petroleum resources.
- Promote an elaborate response strategy in the management of petroleum related disasters.
- Provide for the efficient and optimal distribution of functions between the Federal and Federal Member State Governments in the sector while fostering cooperation with relevant public institutions.
LEGAL AND REGULATORY FRAMEWORK
Somalia’s petroleum strategy recognizes that there need to be a set of rules which govern petroleum activities such as the:
- Petroleum Law
- Petroleum Regulations
- Somalia Federal Government Contracts (Reconnaissance, Production Sharing Agreement (PSA) and Surface Access Agreements)
Somalia Federal Government Contracts (Reconnaissance, Production Sharing Agreement (PSA) and Surface Access Agreements)
Functions of the Ministry
The Ministry shall perform the following functions:
- Make decisions on strategies, plans and policies for the development of the Petroleum industry;
- Issue regulations with respect to the management of Petroleum Operations as recommended to the Ministry by the Somalia Petroleum Authority as contemplated by this Law;
- Make decisions on policies and forms of cooperation with foreign entities, and;
- Manage the process of substituting Production Sharing Agreements for rights granted by the Somali Democratic Republic on or before December 30, 1990, as contemplated by Article 45;
Functions of SPA
The SPA shall perform the following functions:
- To regulate, through the issuance, monitoring, modification and enforcement of Authorisations and the issuance of decisions, orders and directions under this Law and the Regulations, the conduct of Petroleum Operations in accordance with and subject to the provisions of this Law;
- To ensure proper qualification of Authorised Persons, including without limitation, ensuring that Authorised Persons are commercially viable, credit worthy persons with the technical capability to perform their obligations;
- To implement and ensure compliance by the relevant persons with any Authorisation, rule, decision, order or direction issued by the SPA in accordance with this Law; and
Study and keep under review matters relating to the Petroleum industry which the Ministry requests the SPA to monitor, and report from time to time on such matters and recommend such measures as it considers necessary or advisable in the public interest for the control and development of that industry.
Purpose of SONOC
The purpose of the SONOC is to be a commercial enterprise Controlled by the Government to conduct Petroleum Operations in Somalia with the aim of maximising the value of petroleum resources to build Somalia’s economy and support the national budget as well as to promote economic development. SONOC shall be entitled to exercise the right of participation referred to in subsection 30(1). Somali National Oil Company may acquire an Authorisation by direct acquisition or pursuant to a bid process conducted by the SPA in the same manner as any other Person.