Overview
The prospects around hydrocarbons (oil and gas) and future oil concessions have been accelerating in Somalia since 2012. The potential in this sector is already an important factor in political dynamics in the country, as seen for example in the ongoing maritime dispute with Kenya, as well as through the interests of several different countries and the involvement of a number of commercial actors.
This memo argues that, while legislation and regulation, at least nominally, has been progressing in the last 3-4 years, it remains unfinished but now frames the operation of the political marketplace, with control over the Ministry of Petroleum and Somalia Petroleum Agency (SPA) constituting the key motivations of political elites and associated bargaining. Control of these ‘institutions’ enables access to informal flows of money as well as allows control over the allocation of sub-contracts, which are likely to come from the various grants and loans that will become available through the debt relief process. Control over contracts is a major issue in Somalia’s political economy and political marketplace.
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