Disputed oil blocks at stake as law gives Somalia power to sell

Mahdi Ali  Somalia’s President Mohamed Abdullahi Farmaajo has signed a law that gives the central government powers to sell the country’s oil blocks for commercial drilling, giving his administration full control of the unexploited crude deposits. The new Petroleum Act paves the way for creation of a state-owned oil company with authority to sign exploration deals with foreign entities that have been lining up for the country’s more than 200 petroleum blocks. The law also raises a new dimension in the ongoing maritime dispute between Kenya and Somalia, as it unlocks Mogadishu’s powers to potentially sell oil blocks that are in the disputed area of the Indian Ocean waters. A ruling on the case filed before the International Court of Justice is expected in July. The new Act dissolves all agreements entered into between Somalia and outside entities between 1991 and 2012. It also states that deals entered into with Somalia before Siad Barre was ousted will be retained, though these may need to be updated. These were some of the things missing in Somalia’s oil policy, which held back the country from holding public auctions for its oil stocks.