CONTRACTS AND CONTROVERSY: Demystifying Soma Oil

By T. Roble

The extractives company, Soma Oil and Gas Holding Limited (Soma) has secured a unique and potentially lucrative contract to exploit a dozen offshore oil and gas blocks off Somalia’s Southern and Central Coast.

The contract that was signed in August 6th 2013 has been the epicenter of controversy. Analysts say Soma Oil mandate to conduct seismic surveys off Somalia’s territorial waters is laced with irregularities of seismic proportion. A new UN report that was leaked to Goobjoog News points to corruption involving Soma Oil officials and civil servants within Somalia’s Ministry of Petroleum and Mineral Resources.

Soma Oil, the genesis In early 2013, presumably shortly after the London New Deal Conference for Somalia, an oil company was gobbled up and few months into existence the company landed a lucrative seismic survey with Somali government. At the time Somali president Hassan Sheikh Mohamud was the darling of the west, and had just been in office for a year.

Dossier

Two years down the line, accusations and counter accusation have reached fever pitch and the UK Serious Fraud Office is launching investigations into the company’s dealings in Somalia. Equally, the UN Monitoring Group for Eritrea and Somalia has just released a dossier detailing how the company and the government of Somalia have been involved in a financial conspiracy in the name of contracts best seen as a quid pro quo arrangement, a distant cry from anything legal.

But which company is Soma Oil and who are the faces behind this Oil company which has swept the government off its feet? Notable in the list is Lord Michael Howard, Soma chairman and former leader of the Conservative Party in Britain, a lawyer by training, and served in UK Parliament for 27 years.

Many believe that his UK ruling party credentials helped him seal the deal with Somali authorities who were then in good books with British Prime Minister David Cameron, also the leader of conservative party. Cameron had just hosted the biggest international conference for Somalia in London that year with billions of dollars pledged by donor countries.

Enter Basil Shiblaq. According to Soma website, Shiblaq is the deputy chairman of Soma Oil  and commands 45 years experience in oil and energy sector. Shiblaq is listed as one of the founding investors in Ophir Energy plc, an oil and gas exploration company listed on the London Stock Exchange.

Robert Sheppard is the chief executive officer at Soma; he doubles up as advisor at British Petroleum, BP on Russia, a pointer to possible relationship between the two oil companies. Sheppard graduated from the University of Wyoming in 1972 and has a Bachelor’s degree in Physics and Mathematics. He graduated from the Columbia University Business School in 1991 with an Executive MBA degree.

Georgy Djaparidze , is a member of Board of Soma Oil & Gas Holdings and only joined in December 2013. A Russian citizen, Djaparidze is said to be close ally to President Vladamir Putin and heads the Winter Sky Oil exploration company which bought stakes at Soma oil. The Russian tycoon is said to have brought much needed cash injection to Soma Oil and Gas; raising the company’s financial portfolio and consolidating its Somali oil bid. In its website, Soma Oil says Djaparidze currently runs a private investment fund and practices law at an international law firm based in the US and Moscow.

Philip Wolfe is the Chief Financial Officer at Soma Oil. He joined the company in September 2013 prior to which he has been a corporate finance adviser to oil & gas companies for over 23 years. Soma Oil says Wolfe has extensive experience in raising capital for oil & gas companies and also versed with many emerging markets and has recent experience in East Africa, the Middle East and Asia.

Mohamad Ajami, a Lebanese is a non Executive Director at Soma with over 35 years’ experience in the oil and gas, petrochemicals and mineral resources sectors. He is also founder of the Levant Group a firm focused on investments in oil and gas, mineral and recyclable energy mainly in Africa, Russia. Ajami is said to have been instrumental in roping the Russian investor, Djaparidze into the company, a deal which according to the Independent, earned his company AfroEast 1.5 million shares in Soma Oil with a further 12.5 million Soma warrants worth $12.5m from Djaparidze. Ajami was also being investigated by the US Securities and Exchange Commission for his alleged role in a deal in Libya which he was to help a US publicly traded company, Och-Ziff land a deal to manage money for the Libyan Investment Authority, the country’s sovereign-wealth fund.

Other members of SOMA Oil are Lord Clanwilliam and W. Richard Anderson, both non executive directors. Questionable deals

Between 2013 and 2014, Somali government and Soma Oil and Gas entered into contracts which would grant the latter oil exploration rights and subsequent exploitation rights. However these contracts are now subject to investigation by the UK Serious Fraud Office for corruption. The UN Monitoring Group for Eritrea and Somalia has also raised questions on the nature and manner in which these contract were entered into pointing to massive corruption, irregular payments and conspiracy by the Ministry of Petroleum, then Natural Resources with the Oil company for exclusive rights.

Of contention are two major issues: The Seismic Option Agreement; In the contract Soma Oil is awarded the right to conduct seismic surveying of the country’s southern and central coast. Equally, Soma Oil got the subsequent right to exploit 12 offshore oil and gas blocks totaling 60,000km2 of its own choosing. Capacity Building Agreement: Soma Oil was to support the Ministry of Petroleum by paying advisors, technical staff to build the ministry’s capacity besides supplying office equipment.

‘Capacity Building Agreement’

The agreement read in part, “Soma agrees to pay the salary costs of up to a maximum of six months consultants and advisors such salary in each case not to exceed $5,000 per month for each person over a period of 12 month period starting from the date agreed between the two parties.” However these two agreements between Soma Oil and the Ministry have been shrouded with secrecy, double payments and cover up payments to conceal any underhand dealings and protect Soma Oil from any questioning by the Finance Governance Committee from the ministry of Finance.

In our extensive coverage and investigation into these developments, Goobjoog News will unearth the rot and conspiracies between Soma Oil and the Ministry of Petroleum and Mineral Resources in a scum which would likely rob the country and deny its citizen a share of the oil resources in the country. Goobjoog News will also delve further into all past oil contracts involving a number of other oil companies.