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Somalia

Somalia: Accusations from UN experts prompt corruption probe into British oil company

London Somalia Conference, May 2013.
London Somalia Conference, May 2013. Foreign and Commonwealth Office, CC license

UN sanctions experts this week accused a British company of making large payments to Somalia’s oil ministry, saying it creates a serious conflict of interest. The allegations in a report have prompted an investigation into Soma Oil & Gas by Britain’s Serious Fraud Office. Soma is chaired by Lord Michael Howard who previously led the British Conservative Party.

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“Usually what African regimes like to do, they like to disguise payments to officials who facilitated their deal being approved under the guise of: we’re building a ministry, we’re doing equipment, increasing their capacity to deal with us,” Abdillahi Mohamud, managing director of the East African Energy Forum, told RFI.

In a 28-page report to a UN Security Council committee, experts said Soma Oil & Gas paid nearly 600,000 US dollars (550,000 euros) to protect and expand their exploration contract with the Somali government. Soma says some of this was in the form of a “Capacity Building Agreement” requested by the Somali government to build up oil industry expertise.

The accusations contained within the report are thought to have prompted the Serious Fraud Office's investigation into allegations of corruption against Soma.

In a statement, the company said that it is “confident” that the allegations have “no basis”. Regarding the “Capacity Building Agreement”, Soma said that the UN Monitoring Group “fundamentally misunderstood the nature, purpose and destination of the payments”.

The UN report also details alleged payments to 14 employees of Somalia’s petroleum and mineral resources ministry.

“If the civil servants who are overseeing their contract and in charge of negotiating the next stages of their contract are in fact paid by Soma, then that does create a very concerning conflict of interest,” says Barnaby Pace, an oil campaigner for Global Witness, a natural resource watchdog.

Soma also paid nearly 500,000 US dollars to a Canadian lawyer who advised the Somali government on the contract it was negotiating with the British company. Soma says any suggestion that this was “improper, unlawful or gave rise to a conflict of interest is incorrect and defamatory”.

Questions are being raised about possible links between Soma and the British government, especially given Lord Michael Howard’s role in leading the company.

“If you ask the British government about their connection, they’ll say absolutely zero,” says Calgary-based Mohamud, whose East African Energy Forum group monitors the use of Somalia’s natural resources. “They needed help getting permits to have armed guides on their SeaBird seismic vessel. There needed to be quite a bit of British government permission or turning a blind eye to the operation in order for this to proceed,” he adds.

Global Witness says it has seen a letter from Howard to British government officials, which suggests Howard accepted the job at Soma with the encouragement of the British Foreign and Commonwealth Office. Howard later explained this as a “mistaken interpretation”.

Campaigner Barnaby Pace believes that Soma should respect the moratorium on oil deals called for the UN Monitoring Group.

“They should not be moving onto the next stage which was doing a licensing round and handing out licenses to drill in these oil blocks,” he says. “And that certainly shouldn’t happen until these allegations are cleared up.”

The Serious Fraud Office is calling for whistleblowers to come forward to help in its investigation of Soma. The British company says it expects the matter to be resolved in the “near future”.

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