Tuesday, August 04, 2015

UK Oil Corruption in Somalia

A British oil company paid hundreds of thousands of dollars which went to senior Somali civil servants, according to a UN report. UN investigators say the payments by Soma Oil & Gas amount in some cases to "acts that undermine Somali public institutions through corruption". The firm’s chairman is the former Conservative Party leader Michael Howard.

The report details payments totalling $490,000 (£315,000) from Soma Oil & Gas to the Somali Ministry of Petroleum and Mineral Resources, beginning in June 2014. The money was ostensibly intended to cover the salaries of a small number of experts, including geologists and geoscientists. In reality though, the United Nations investigators say the scheme appears to have been used to "fund systematic payoffs to senior ministerial officials", some of whom were "instrumental in both securing the company's initial contract, and negotiating subsequent agreements".

One recipient of money under the scheme was Dr Farah Abdi Hassan, the director general of the ministry. He received $36,000 (£23,000) over a period of 12 months - about three times his Somali government salary, which investigators say he continued to draw. The report claims that Mr Hassan suggested in emails that Soma's contractual agreements with the government - both past and prospective - could be subject to review if financial "assistance" was not forthcoming.

The extent of Somalia's oil and gas reserves are unknown, but some estimates put it at as much as 110 billion barrels - nearly half that of Saudi Arabia. The United Nations in 2013 called for a moratorium on oil deals, saying that, in the absence of a legal and regulatory framework to share energy resources, such agreements could fuel violence and corruption in a country still struggling with clan tensions and battling an Islamist insurgency.

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