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Where we come from?
The legacy investor of Soma OG has been deeply involved in the exploration of offshore Somalia for over a decade, marking significant milestones along the way. In 2014, a comprehensive regional 2D survey was commissioned by the same, covering over 20,000 line kilometers and was conducted by Seabird, funded by Soma Oil & Gas UK, a predecessor to Soma OG BVI. Between 2015 and 2017, Soma financed a major study by RPS Energy, utilizing the queried 2D seismic data and incorporating insights from various other studies, including Robertson Research's Somali Wells analysis and others. In 2020, the principals of Soma Oil & Gas UK formed Coastline Exploration and commenced negotiations for several PSA contracts, leveraging the technical understanding gained from the 2D and RPS studies. From 2022 to 2023, Coastline Exploration Soma UKs' predecessor commissioned a further study with Houston-based consultancy U3Explore (Actus Veritas) to analyze existing data and develop a robust marketing strategy for the PSAs. In 2024, Soma OG acquired PSA blocks 129/130 and 192, two of the most highly-rated blocks identified in previous studies. The Federal Government of Somalia and Somali Petroleum Authority welcomed and ratified the agreement.
Why is Somalia safe?
Under the leadership of President Hassan Sheikh Mohamud, Somalia is building a transparent government committed to fostering a stable and investor-friendly environment. This effort is backed by strong international support, enhancing the sovereign country's credibility and decision-making. Soma OG's deep-rooted presence and extensive experience in the region position it as a reliable partner, ensuring seamless operations and robust security measures. The company leverages its comprehensive understanding of the local landscape and strategic alliances with global experts to mitigate risks and streamline logistics. With a transparent government framework and international community backing, Soma OG is dedicated to providing a secure, efficient, and conducive environment for oil and gas exploration and development. This commitment not only enhances investor confidence but also paves the way for sustainable growth and economic prosperity in Somalia. Further Soma OG is ready to offer future partners and new market entrants unparalleled logistics and security support.
What are the PSA Terms?
For Oil exploration, the terms include an exploration period of 5+2+2 years with a commitment of drilling one exploratory well per PSA. The royalty rate is fixed at 5.0%. Cost recovery is set at 75.0%, with an uplift of 6.0%. The profit share between the government and the contractor varies: for a ratio less than 1, it is 15% for the government and 85% for the contractor; for a ratio greater than 2.0, it is evenly split at 50% each. Additionally, the corporate income tax rate is 30.0%, and state participation can be up to 10% five years after first production. For Gas exploration, the terms also include an exploration period of 5+2+2 years with a commitment of drilling one exploratory well per PSA. The royalty rate ranges from 0.5% to 4.0%. Cost recovery is set at 80.0%, with an uplift of 6.0%. The profit share between the government and the contractor varies: for a ratio less than 1, it is 15% for the government and 85% for the contractor; for a ratio greater than 5.0, it is 55% for the government and 45% for the contractor. The corporate income tax rate is also 30.0%, and state participation can be up to 8% five years after first production.
How does the Petroleum Law protect the Investor?
The Somali Petroleum Law provides substantial protections and benefits to investors, creating a favorable environment for international petroleum companies. It establishes a comprehensive legal and regulatory framework ensuring transparency and stability, crucial for long-term investments. The law includes Most Favored Nation (MFN) and National Treatment clauses, guaranteeing non-discriminatory and fair treatment for foreign investors, equivalent to domestic ones. Financial security is a key feature, allowing free transfer of funds and repatriation of investments. In cases of expropriation, the law mandates fair compensation, safeguarding investor assets against arbitrary government actions. Dispute resolution mechanisms, including arbitration, provide structured processes to address and resolve conflicts, enhancing legal security. Operationally, the law supports the establishment of the Somali Petroleum Authority (SPA) and the Somali National Oil Company (SONOC), which oversee regulatory compliance and operational efficiency. This support fosters a stable investment environment, encouraging the development of Somalia’s petroleum resources and contributing to economic growth. The law promotes cooperation between International Oil Companies (IOCs) and consortiums, facilitating partnerships and technical expertise sharing. Revenue management provisions ensure fair distribution of profits, including state participation, aiding Somalia’s socio-economic development. Overall, the Somali Petroleum Law aims to attract and retain international investors by protecting their interests and offering numerous operational and economic benefits, crucial for advancing Somalia's oil and gas sector