Calculating how much each FGS/FMS/Coastline pockets in the oil deal

[warside]

Let's assume that this company found oil and can extract 500k barrels per day, and the price is $80/barrel, so:
total amount will be $14.6 billion yearly, let's divide that money.

	Coastline	Federal Government	States (2008 agreement)
Royalty(5%)	0	292 million	438 million
Cost recovery (80%)	~ 11.1 billion	0	0
tax (30%)	0	416.1 million	0
profit (50%)	970.9 million after tax	762.85 million	624.15 million
total	~ 12 billion	1,470,950,000	1,062,150,000

So until they recover the costs Coastline will take most of the money, and lets calculate how much they will take after that in the same example.
Coastline share after they recover all costs = 4,854,500,000 which is around 33.25%
Somalia share after Coastline recovers costs = 9,745,500,000 which is around 66.75%.
The problem is that 80% cost recovery is too high, and although petroleum ministry's director general stated that they'll recover their costs in the 1st 5 years of production but it's still high, and they should be monitored also so we know what their costs are.

 

[Mugi]

Let's assume that this company found oil and can extract 500k barrels per day, and the price is $80/barrel, so:
total amount will be $14.6 billion yearly, let's divide that money.

	Coastline	Federal Government	States (2008 agreement)
Royalty(5%)	0	292 million	438 million
Cost recovery (80%)	~ 11.1 billion	0	0
tax (30%) on Coastline profit	0	416.1 million	0
profit (50%)	970.9 million after tax	762.85 million	624.15 million
total	~ 12 billion	1,470,950,000	1,062,150,000

So until they recover the costs Coastline will take most of the money, and lets calculate how much they will take after that in the same example.
Coastline share after they recover all costs = 4,854,500,000 which is around 33.25%
Somalia share after Coastline recovers costs = 9,745,500,000 which is around 66.75%.
The problem is that 80% cost recovery is too high, and although petroleum ministry's director general stated that they'll recover their costs in the 1st 5 years of production but it's still high, and they should be monitored also so we know what their costs are.

Do we even know for sure that there is oil in the places they want to drill? I've heard that seismic measurements are not always correct and that exploration wells need to be drilled to even know if there is enough oil there to be profitable for extraction

 

[warside]

Do we even know for sure that there is oil in the places they want to drill? I've heard that seismic measurements are not always correct and that exploration wells need to be drilled to even know if there is enough oil there to be profitable for extraction

Nobody knows, I think since they are small company they'll try a few wells and if they don't find anything they'll abandon the whole thing, offshore oil is very expensive.

 

[Strawberry]

Nobody knows, I think since they are small company they'll try a few wells and if they don't find anything they'll abandon the whole thing, offshore oil is very expensive.

Is the company Somali owned ?

 

[warside]

Is the company Somali owned ?

No, it's foreign.

 

[ZodiaK]

Do we even know for sure that there is oil in the places they want to drill? I've heard that seismic measurements are not always correct and that exploration wells need to be drilled to even know if there is enough oil there to be profitable for extraction

Signs look positive.

During our study of this area ranging from 1st January to 30th June 2019, we observed oil slicks / dark areas on the following dates: 10th Mar, 22nd Mar, 27th Mar & 04th April. These slicks dark areas were observed off the coast of Ceel Dheer, Adale & Warsheikh.

Based on our analysis, we conclude that the 4 dark areas identified are indeed oil slicks and not look-alike features.

The process of differentiating oil slicks into oil seeps or oil spill is a more complex task and requires us to look at additional contextual information.

Several studies indicate that oil slicks observed repeatedly in the same location are the main indicator of an oil seep. ‘Usually when oil is observed on the sea surface within the same area and is captured by satellite imaging in different scenes…. there is a strong indication of a persistent source (of Hydrocarbons) on a nearby location’

 

[bidenkulaha]

The meeting has begun.

 

[NordicSomali]

Very stupid of Somalia not to extract that oil when the world wasn't transitioning to green energy. Now demand for oil will keep falling.

 

[Mugi]

Very stupid of Somalia not to extract that oil when the world wasn't transitioning to green energy. Now demand for oil will keep falling.

It think there is still enough time until the demand falls to make profit. Electric cars need huge infrastructure changes and oil is used in many other things apart of the mobility industry.

 

[Prince of HS]

Do we even know for sure that there is oil in the places they want to drill? I've heard that seismic measurements are not always correct and that exploration wells need to be drilled to even know if there is enough oil there to be profitable for extraction

I doubt somali

Signs look positive.

During our study of this area ranging from 1st January to 30th June 2019, we observed oil slicks / dark areas on the following dates: 10th Mar, 22nd Mar, 27th Mar & 04th April. These slicks dark areas were observed off the coast of Ceel Dheer, Adale & Warsheikh.

View attachment 241595

View attachment 241596


Based on our analysis, we conclude that the 4 dark areas identified are indeed oil slicks and not look-alike features.

The process of differentiating oil slicks into oil seeps or oil spill is a more complex task and requires us to look at additional contextual information.

Several studies indicate that oil slicks observed repeatedly in the same location are the main indicator of an oil seep. ‘Usually when oil is observed on the sea surface within the same area and is captured by satellite imaging in different scenes…. there is a strong indication of a persistent source (of Hydrocarbons) on a nearby location’


View attachment 241597

so that explains why HSM has huge plans to build a port and airport in cadale. Heard he’s going to build military bases from Hobyo to kismaayo as well along coastal towns Just heard revenue from o is used to develop our lands

 

[Prince of HS]

Signs look positive.

During our study of this area ranging from 1st January to 30th June 2019, we observed oil slicks / dark areas on the following dates: 10th Mar, 22nd Mar, 27th Mar & 04th April. These slicks dark areas were observed off the coast of Ceel Dheer, Adale & Warsheikh.

View attachment 241595

View attachment 241596


Based on our analysis, we conclude that the 4 dark areas identified are indeed oil slicks and not look-alike features.

The process of differentiating oil slicks into oil seeps or oil spill is a more complex task and requires us to look at additional contextual information.

Several studies indicate that oil slicks observed repeatedly in the same location are the main indicator of an oil seep. ‘Usually when oil is observed on the sea surface within the same area and is captured by satellite imaging in different scenes…. there is a strong indication of a persistent source (of Hydrocarbons) on a nearby location’


View attachment 241597

so that explains why HSM has huge plans to build a port and airport in cadale along with the recent offensives. Heard he’s going to build military bases from Hobyo to kismaayo as well along coastal towns. Just hope revenue from oil is used to develop our lands

 

[Burqad]

Since my grandmother was born people have been talking about oil in Somalia. Let us hope this isn’t another lie.

 

[repo]

500,000 barrels is generous. That said, I hope that money is co-managed by an international board.

 

[Burqad]

500,000 barrels is generous. That said, I hope that money is co-managed by an international board.

Stupid. Why do Somalis assume that foreigners are harder to corrupt than each other? Is a noncorrupt Somali so hard to imagine?

 

[Periplus]

I said this earlier but I’ll say it again.

The Somali government needs to hire an auditing firm of a top-calibre to keep Coastline in check.

I would recommend KPMG, Pricewaterhouse Cooper, Deloitte or Ernst&Young.

They are the best in the field and will know of any tricks that Coastline might try to pull.

 

[Aurelian]

Let's assume that this company found oil and can extract 500k barrels per day, and the price is $80/barrel, so:
total amount will be $14.6 billion yearly, let's divide that money.

	Coastline	Federal Government	States (2008 agreement)
Royalty(5%)	0	292 million	438 million
Cost recovery (80%)	~ 11.1 billion	0	0
tax (30%)	0	416.1 million	0
profit (50%)	970.9 million after tax	762.85 million	624.15 million
total	~ 12 billion	1,470,950,000	1,062,150,000

So until they recover the costs Coastline will take most of the money, and lets calculate how much they will take after that in the same example.
Coastline share after they recover all costs = 4,854,500,000 which is around 33.25%
Somalia share after Coastline recovers costs = 9,745,500,000 which is around 66.75%.
The problem is that 80% cost recovery is too high, and although petroleum ministry's director general stated that they'll recover their costs in the 1st 5 years of production but it's still high, and they should be monitored also so we know what their costs are.

So they will need max 5 years to recover?

 

[JaredAbdullahiKushner2000]

Nobody knows, I think since they are small company they'll try a few wells and if they don't find anything they'll abandon the whole thing, offshore oil is very expensive.

What about the environmental damage that could occur? How to deal with that?

 

[Aurelian]

What about the environmental damage that could occur? How to deal with that?

This is Somalia, we don't have these types of concerns here

 

[Aurelian]

The cost of establishing natural gas line ( Turkstream) between Russia and Turkey is around 13 billion dollar.