Somalia engages international legal counsel to support it in the development of a model PSA

The Ministry of Petroleum and Mineral Resources is pleased to announce that it has engaged international legal counsel to undertake legal advisory work in relation to the development of a model Production Sharing Agreement (PSA).

With the assistance of the African Legal Support Facility (ALSF), IMMMA Advocates, which is a member the DLA Piper Africa Group, was selected to support the Government in the PSA Somalia Toolkit Project following a competitive bidding process.

The African Legal Support Facility (ASLF) is a facility of the African Development Bank and is mandated to assist African countries with the negotiation of complex commercial agreements pertaining to the extractive industry.
It is in this regard that the ALSF is supporting the Ministry with the development of a model PSA. During the bidding process, five companies were shortlisted and issued with an Expression of Interest (EoI).
On 15 October 2015, the ALSF registered technical and financial proposals from three out of the five shortlisted international law firms. The registered technical and financial proposals were provided by: IMMMA Advocates – DLA Piper Group (Dar Es Salam), Clyde & Co LLP and Watson Farley & Williams LLP. After careful consideration of the received proposals, IMMMA Advocates was selected since it offered the best terms from cost control/capabilities.

Mohamed Mukhtar Ibrahim, Minister of Petroleum and Mineral Resources said: “PSA model is the most appropriate type of contractual arrangements for petroleum exploration and development where an oil company carries the entire exploration risk and the government owns both the resource and the installations. It is only after finalizing this model along with other ongoing political and legal issues that Somalia will be able to enter into PSA agreements.”