Somalia: A Rejoinder – Strategic Calculus, Not Capitulation: in Response to Alarmist Arguments On Turkey-Somalia Hydrocarbons Agreement

A recent opinion piece in Addis Standard, “Fueling fragility: Turkey’s Somalia oil deal could risk new crisis in the Horn,” written by Adam Daud Ahmed, casts a predictably skeptical eye upon the hydrocarbon’s agreement forged between Somalia and Turkey. While prudent consideration of resource management and regional stability is undoubtedly warranted, Adam’s analysis succumbs to an overly simplistic narrative of exploitation and impending crisis. This perspective regrettably overlooks the compelling economic imperatives driving Somalia’s strategic partnership, the well-established global norms governing nascent hydrocarbon producers, and the broader stabilizing influence Turkey demonstrably seeks to exert within the volatile Horn of Africa.

From my vantage point here in Mogadishu, this agreement appears far less a reckless gamble poised to ignite further fragility and far more a carefully calculated stride towards unlocking Somalia’s dormant economic potential – a move rendered utterly necessary by decades of debilitating instability and a critical lack of internal capacity.

Adam’s central contention rests precariously on the assertion that the 90% cost recovery clause granted to Turkey constitutes “sweeping control” and is inherently “exploitative.” This interpretation reveals a fundamental misunderstanding of the core mechanics underpinning Production Sharing Agreements (PSAs), the globally recognized and widely adopted framework for resource development in nations such as Somalia. These countries, still grappling with the legacies of conflict and underdevelopment, often lack the multi-billion-dollar capital and highly specialized technology indispensable for complex offshore exploration. This 90% allocation is emphatically not a permanent forfeiture of Somalia’s inherent wealth; rather, it functions as a temporary mechanism designed to allow Turkey to recoup its substantial, high-risk initial investment in exploration and infrastructure development.

Crucially, once these upfront costs are recovered – a process that inherently incentivizes efficient and rapid development – the significant profits generated will be shared between Somalia and Turkey. Moreover, Somalia has already wisely secured an immediate 5% royalty on every barrel of hydrocarbons produced, ensuring an early revenue stream. To simplistically frame this arrangement as mere exploitation ignores the stark reality that without such a partnership, these potentially vast resources would likely remain frustratingly untapped for decades to come, offering absolutely no tangible benefit to the long-suffering Somali people.

Furthermore, the writer laments the perceived absence of signature and development bonuses within this initial agreement. While these financial incentives are undoubtedly desirable components of any resource development deal, their absence in a foundational agreement with a nation still actively recovering from the deep scars of protracted conflict is far from unusual. Somalia’s immediate priority is to attract the substantial foreign investment and initiate the crucial process of resource exploration without simultaneously incurring crippling levels of sovereign debt. These bonuses, representing additional financial benefits for Somalia, can be strategically and effectively negotiated in subsequent phases of the partnership, particularly as exploration activities yield positive results and Somalia’s inherent bargaining power within the agreement framework naturally increases. Similarly, the provision allowing for revenue repatriation, another point of contention for Adam, is a standard and indeed essential inclusion in international investment treaties. Such clauses are vital for attracting foreign capital and fostering the crucial investor confidence necessary for long-term engagement. It is also critical to recognize that these provisions are typically carefully balanced by robust taxation laws and the implementation of strategic incentives designed to encourage local reinvestment, elements that will undoubtedly form an integral part of Somalia’s evolving long-term regulatory framework governing the hydrocarbons sector.

Turkey’s long-standing and multifaceted relationships with Ethiopia, Kenya, and Djibouti, all pivotal players in the regional geopolitical landscape, further underscore a broader strategic vision

Adam’s criticism regarding the alleged lack of comprehensive consultation with regional states, with particular emphasis on Somaliland, undeniably touches upon a deeply sensitive and politically complex issue within Somalia’s internal dynamics. While the pursuit of broader national consensus-building is an ideal and long-term objective, the Federal Government of Somalia (FGS), as the internationally recognized sovereign authority representing the entirety of Somalia, possesses the inherent constitutional mandate and legal prerogative to manage Somalia’s natural resources within its internationally recognized borders. Turkey’s multifaceted engagement with Somaliland, demonstrably characterized by actively facilitating dialogue between Hargeisa and Mogadishu and providing significant development aid to the region, clearly illustrates a nuanced and strategically balanced approach rather than outright disregard for regional concerns. To suggest that this agreement is solely a “geopolitical provocation” directed against Somaliland fundamentally overlooks the delicate and intricate balancing act that Turkey is actively undertaking within the broader Horn of Africa. Turkey’s long-standing and multifaceted relationships with Ethiopia, Kenya, and Djibouti, all pivotal players in the regional geopolitical landscape, further underscore a broader strategic vision that extends far beyond a simplistic and ultimately unproductive zero-sum game with Somaliland.

The alarm raised by by the writer concerning the initial 5% royalty secured by Somalia also warrants crucial contextualization. This immediate revenue stream, while perhaps appearing modest at first glance, is undeniably crucial for a nation grappling with pressing and immediate financial needs stemming from decades of state fragility and underdevelopment. It represents a tangible and immediate economic benefit accruing to Somalia from the very outset of the project, a stark contrast to a hypothetical and uncertain future where Somalia attempts to unilaterally finance and execute complex offshore exploration independently – a scenario fraught with immense financial risk and significant technical limitations that the nation currently lacks the capacity to overcome. The historical precedent of numerous other nations embarking on their own hydrocarbon journeys with similar or even less favorable initial terms, strategically leveraging their growing capacity and experience to secure progressively better deals in subsequent agreements, offers a far more realistic and historically grounded perspective than Adam’s immediate and somewhat dismissive condemnation of this initial royalty rate.

Finally, Adam’s speculative assertions regarding Turkey’s underlying motives, insinuating a direct link between its engagement with Somalia and perceived setbacks in other geopolitical arenas, regrettably diminishes the genuine economic and strategic alignment that demonstrably exists between the two nations. Somalia is actively seeking a reliable and committed long-term partner for its multifaceted development and its pressing security needs. Turkey, with its steadily growing influence across the African continent and its strategic imperative to diversify its energy sources, finds in Somalia a willing and strategically important collaborator. The robust security cooperation between the two nations, most notably including Turkey’s significant military training mission based in Mogadishu, directly contributes to Somalia’s long-term stability – a crucial and non-negotiable prerequisite for any successful and sustainable resource development to occur.