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Somali President signs Petroleum Law, Senate approves Elections Law

Saturday February 8, 2020

MOGADISHU (HOL) - President Mohamed Farmaajo Saturday signed the amended Petroleum Law marking a major milestone for the country’s efforts to exploit oil resources even as some Federal Member States rejected the law as lacking in consultations.

Villa Somalia said in a statement the signing into law of the Petroleum Law ‘demonstrates to international investors the commitment of the Government and the Somali people to achieve their vision for stability and to move forward in the spring of prosperity and development.’

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The signing into law of the Bill follows its passage by both Houses of the Federal Parliament. The law was first passed in 2008 but amended in 2017. The new law incorporates a Revenue Sharing Model between the Federal Government and Federal Member States.

The Revenue Sharing Model allocates the Federal Government 55% of revenue from offshore drilling while the Federal Member States share the remaining 45% distributed in a formula between the oil and non-oil producing states and districts.

Federal Member States such as Jubbaland and Puntland have dismissed the law calling for more consultations between the two levels of government.

Petroleum Minister Abdirashid Ahmed hailed the signing of the Law as instrumental in paving way for oil exploitation in Somalia.

As we embark on our oil journey following the completion of the legislative process with the Presidential ratification, we look forward to the year ahead, and continuing to development our nation for the benefit of our people,” Ahmed said in a tweet.

The passage of the law now paves way for licensing of oil companies to starting oil drilling in the country. The government had set January 20 as deadline for licensing of international oil companies however that timeline was not met and is likely to moved later into the year.

Meanwhile the Upper House today endorsed the Elections Bill after lengthy debates which saw Parliament drop an election formula proposed by the National Independent Electoral Commission.

The Commission had proposed the Closed-List option under the Proportional Representation system.
Following public consultations by a Lower House elections ad-hoc committee late last year, the House adopted the First-Past-The-Post or Majoritarian Model.

It is not however clear if the model will be used in the upcoming elections later in the year amid differences between the Federal Government and the Federal Member States on the elections formula.

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