First oil well will be operational in the coming monts, HSM says

[Barkhadle1520]

Good news? As much as I wish for a prosperous Somalia, this is terrible. All of the profit is going into the pockets of hsmand his corrupt gang.

Why cant u just quit the act bro everyone knows u aint Somali already

 

[Barkhadle1520]

Why have the seismic data findings not been published?

Ministry of Petroleum hasnt even seen it yet

 

[Barkhadle1520]

So, you don't believe him when he says drilling will be operational in months, but believe that there's oil?

I hope to see your faces when they admit it was all a hoax.

Dont understand people who say theres no oil, theres absolutely no doubt were sitting on billions worth of oil and oil companies worldwide and geologists since the 40s have aknowledged this, its just a matter of when it will be seriously invested into

 

[Barkhadle1520]

Turkey thinking ahout their 90%

Its actually a bad deal for them on the long run, most deals are 50-50, they will earn just 30% after a few years

People who say this deal is bad have not seen how most oil deals in history looked, 50-50 is the absolute worst especially for FGS who are in dire need of funds

 

[Barkhadle1520]

Thats cope Turkey used the MOU situation to take over the oil. HSM was desperate and didn't care about the repercussions of this deal. Look at what Turkey is doing with the airport and port they take all the money and give whats left to FGS.

Not at all, I think whats happening is that they're trying to have a loyal ally in this strategic part of the world, but also a long term customer especially in military purchases

They dont have much to gain if Somalia falls, their reputation would take a big hit and other countries would be more cautious dealing with them, but on the opposite if FGS succeeds their rep will be through the roof

 

[Barkhadle1520]

It’s not about turkey not recovering your initial investments. Have you looked at the totality of the terms we accepted? Did you understand the concessions that we gave? We have the worst oil deal in the past 80 years. And with respect countries don’t make you pay before the deal. This is incredibly basic.

3 blocks out of 205 btw, and 70-30+5roy. after recovery

This doesnt look like a bad deal at all, maybe I'm missing something

 

[Barkhadle1520]

actually it’s guyana has the worst oil deal and their gdp still rose the highest in the world

Damn

 

[Supasta]

3 blocks out of 205 btw, and 70-30+5roy. after recovery

This doesnt look like a bad deal at all, maybe I'm missing something

It’s not just three blocks out of 205. The issue is that you haven’t really read the oil agreement or understood what it means. Somalia is giving Turkey’s designated oil company first choice and exclusive rights to explore any oil block in the country. If Turkey’s company decides a block looks good for exploration, the Somali government is required to sign a Production Sharing Agreement with them for that block

That means no other company can compete or operate there. In practice, Turkey has been handed a blank-check option on Somalia’s oil licenses. If you look at Article 4.1, you’ll see exactly that concession.

 

[Supasta]

Its actually a bad deal for them on the long run, most deals are 50-50, they will earn just 30% after a few years

People who say this deal is bad have not seen how most oil deals in history looked, 50-50 is the absolute worst especially for FGS who are in dire need of funds

Again, that is incorrect. Nowhere does it say Somalia earns 30% after a few years. And beyond the 5% royalty cap, what guaranteed funds does the Somali government actually receive? This is, objectively, the worst oil deal signed in the past eighty years. Do you even know the concessions we gave away?

 

[Barkhadle1520]

It’s not just three blocks out of 205. The issue is that you haven’t really read the oil agreement or understood what it means. Somalia is giving Turkey’s designated oil company first choice and exclusive rights to explore any oil block in the country. If Turkey’s company decides a block looks good for exploration, the Somali government is required to sign a Production Sharing Agreement with them for that block

That means no other company can compete or operate there. In practice, Turkey has been handed a blank-check option on Somalia’s oil licenses. If you look at Article 4.1, you’ll see exactly that concession.

That's just not true show me where exactly in the contract it says that

 

[Barkhadle1520]

Again, that is incorrect. Nowhere does it say Somalia earns 30% after a few years. And beyond the 5% royalty cap, what guaranteed funds does the Somali government actually receive? This is, objectively, the worst oil deal signed in the past eighty years. Do you even know the concessions we gave away?

Are you doing it on purpose or are you just stupid

 

[Supasta]

That's just not true show me where exactly in the contract it says that

Article 4.1 states “The Federal Republic of Somalia hereby grants to the Turkish Designated Entity the sole and exclusive right to conduct Petroleum Operations within and with respect to the Contract Area… the Turkish Designated Entity shall conclude a Production Sharing Agreement with the Turkish Designated Entity for each Contract Area that the Turkish Designated Entity deems appropriate.”

This means Somalia has given Turkey the sole and exclusive right to conduct all petroleum operations in any contract area. It is not limited to a few blocks, because Turkey gets to choose whichever areas it deems appropriate.

When the agreement says “each Contract Area that the Turkish Designated Entity deems appropriate”, it effectively gives Turkey the power to identify any area of interest, and Somalia is then obliged to sign a Production Sharing Agreement for that area. There is no competitive bidding and no consideration of alternative partners.

with respect, go read the oil agreement then let’s go through article by article and debate it. If you haven’t read the oil agreement, how can you say what’s true or not true in regards to it?

 

[Supasta]

Are you doing it on purpose or are you just stupid

Again, you haven’t even read the oil agreement. Have the decency to admit that and engage in the conversation in good faith.

 

[Barkhadle1520]

This means Somalia has given Turkey the sole and exclusive right to conduct all petroleum operations in any contract area. It is not limited to a few blocks, because Turkey gets to choose whichever areas it deems appropriate.

When the agreement says “each Contract Area that the Turkish Designated Entity deems appropriate”, it effectively gives Turkey the power to identify any area of interest, and Somalia is then obliged to sign a Production Sharing Agreement for that area. There is no competitive bidding and no consideration of alternative partners.

with respect, go read the oil agreement then let’s go through article by article and debate it. If you haven’t read the oil agreement, how can you say what’s true or not true in regards to it?

Thats not what it means at all dont know why you distorting it like that

What do you gain from spreading misinformation like this ? Let me just ask you, which region are you from ?

 

[Supasta]

Thats not what it means at all dont know why you distorting it like that

What do you gain from spreading misinformation like this ? Let me just ask you, which region are you from ?

With respect, contract law is my specialty. Please give me what you think it means and why you think it means that. I do not spread misinformation. Also, this is just the beginning we can go through the rest of the articles and see how problematic it is.

I’m from the capital, if you’re trying to imply, there’s some sort of tribalism involved. That’s funny. Let’s go through the text of their agreement article by article and examine it. Like I said, if you’re unable to substantiate the claims that you’re making, then you shouldn’t be making it.

 

[Barkhadle1520]

With respect, contract law is my specialty. Please give me what you think it means and why you think it means that. I do not spread misinformation.

"The Federal Republic of Somalia hereby grants to the Turkish Designated Entity the sole and exclusive right to conduct Petroleum Operations within and with respect to the Contract Area… the Turkish Designated Entity shall conclude a Production Sharing Agreement with the Turkish Designated Entity for each Contract Area that the Turkish Designated Entity deems appropriate.”

This literally just means they can explore the blocks they bought and develop the area they want WITHIN those blocks they bought, thats literally it, none of what you say is written or implied here, the contract area is well known it was 3 blocks TPAO bought, they've already finished exploration, its up to them to chose the area they want to drill now

Also, this is just the beginning we can go through the rest of the articles and see how problematic it is.

Go on, show me the rest

I’m from the capital, if you’re trying to imply, there’s some sort of tribalism involved. That’s funny. Let’s go through the text of their agreement article by article and examine it. Like I said, if you’re unable to substantiate the claims that you’re making, then you shouldn’t be making it.

Was just making sure, knowing that makes things easier on this site

 

[Supasta]

This literally just means they can explore the blocks they bought and develop the area they want WITHIN those blocks they bought, thats literally it, none of what you say is written or implied here, the contract area is well known it was 3 blocks TPAO bought, they've already finished exploration, its up to them to chose the area they want to drill now

Go on, show me the rest

Was just making sure, knowing that makes things easier on this site

No, it doesn’t. The text gives Turkey the right to choose any contract areas it deems appropriate, and Somalia is then required to sign a Production Sharing Agreement for each one. The word “shall” is not a suggestion in contract law, “shall” creates a binding obligation. If what you’re saying were correct, the language would not make sense. If Turkey were limited to the three blocks it already has, why would Somalia be obligated to sign additional Production Sharing Agreements for other areas Turkey deems appropriate?

I’m going to list the sub articles from article four. This is where most of the fiscal terms are. It’s incredibly problematic so let’s go through each one one by one. I want to see the incredible mental gymnastics you do trying to justify this extraordinary lopsided deal. We haven’t even gotten into the other parts that significantly disadvantage us.

4.2 PARTNERSHIP STRUCTURE: “Turkish Designated Entity shall have the right to participate in each Contract Area that it deems appropriate, either as a single Contractor or as a joint venture Contractor without being obliged to establish a new company or an office in the Federal Republic of Somalia. The Turkish Designated Entity, at its sole discretion, may open a branch office in the Federal Republic of Somalia following the commencement of any development and production period.”

4.3 ASSIGNMENT: “Turkish Designated Entity shall have the right to assign all or any part of its Participating Interest, shares, rights, privileges, duties or obligations for each Contract Area to another Entity.”


4.4 PARTICIPATING INTEREST: “Turkish Designated Entity shall have the right to determine the percentage of its Participating Interest under the Production Sharing Agreement for each Contract Area that the Turkish Designated Entity deems appropriate.”


4.5 FEES AND BONUSES: “Before, on or after the signing of the Production Sharing Agreement under this Agreement, the Contractor shall not be obliged to pay to the Federal Government any signature bonus, development bonus, production bonus and any other bonus whatsoever for the fulfilment of its obligations under the Production Sharing Agreement under this Agreement. Before, on or after the signing of the Production Sharing Agreement under this Agreement, the Contractor shall not be obliged to pay to the Federal Government any surface fees and administrative fees. The amounts payable by the Contractor under the community fund and training fund shall become part of, be considered as and be included in Contractor's expenditures for the fulfilment of the minimum expenditure obligation and shall be included in Petroleum costs for the purpose of cost recovery under the Production Sharing Agreement signed under this Agreement.”


4.6 ROYALTY: “The Federal Government shall own and be entitled to a royalty, if any, in cash or in kind up to five (5%) percent of production of all Petroleum produced and saved from the Contract Area. For greater certainty, the production does not include any Petroleum which is reinjected in the reservoirs or consumed for Petroleum Operations in the field.”


4.7 COST RECOVERY AND PRODUCTION SHARING: “The Contractor shall be entitled to recover the Petroleum costs incurred and paid by the Contractor pursuant to the provisions of the Production Sharing Agreement, by taking and separately disposing of an amount equal in value to a maximum of ninety percent (90%) of Crude Oil and ninety percent (90%) of Natural Gas produced from the Contract Area during that fiscal year and not used in Petroleum Operations after the payment of all royalties due to the government. Such cost recovery Petroleum is the "Cost Petroleum" consisting of two categories, the Cost Oil and the Cost Gas. To the extent that, in a fiscal year, the Petroleum costs that are recoverable are less than the maximum value of the Cost Petroleum, the excess shall become part of, and be included in the Profit Petroleum disaggregated into Profit Oil and Profit Gas. Crude Oil and Natural Gas production shall be respectively disaggregated into the Cost Oil and the Profit Oil (and the Cost Gas and the Profit Gas) for the Cost Petroleum and for the Profit Petroleum. The Contractor shall be entitled to Profit Oil and/or Profit Gas and/or Profit Petroleum that will be distributed according to the Production Sharing Agreement.”

4.8 DOMESTIC SUPPLY OBLIGATIONS AND SALE OF PRODUCTION: “The Contractor shall have the right to separately take, dispose, market, export at prices equivalent to international market prices for Crude Oil and Natural Gas of the same grade, gravity and quality prevailing at international markets on similar terms, all of the Cost Gas, Cost Oil, Profit Gas and Profit Oil to which it is entitled as is determined by the Production Sharing Agreement and to retain abroad all funds acquired by it including the proceeds of the sale of its share of exported Crude Oil and Natural Gas and proceeds of domestic sales of Crude Oil and Natural Gas.”

 

[Barkhadle1520]

The text gives Turkey the right to choose any contract areas it deems appropriate, and Somalia is then required to sign a Production Sharing Agreement for each one. The word “shall” is not a suggestion in contract law, “shall” creates a binding obligation.

No ? They were sold 3 blocks which they are free to develop however they see fit thats it, they can buy more in the future tho

Youre desperatly trying to twist the words in the text Just put the baradho in the bag bro this is the worst fgs conspiracy theory Ive seen so far

4.2 PARTNERSHIP STRUCTURE: “Turkish Designated Entity shall have the right to participate in each Contract Area that it deems appropriate, either as a single Contractor or as a joint venture Contractor without being obliged to establish a new company or an office in the Federal Republic of Somalia. The Turkish Designated Entity, at its sole discretion, may open a branch office in the Federal Republic of Somalia following the commencement of any development and production period.”

No problem in this, contract area is still their blocks

4.3 ASSIGNMENT: “Turkish Designated Entity shall have the right to assign all or any part of its Participating Interest, shares, rights, privileges, duties or obligations for each Contract Area to another Entity.”


4.4 PARTICIPATING INTEREST: “Turkish Designated Entity shall have the right to determine the percentage of its Participating Interest under the Production Sharing Agreement for each Contract Area that the Turkish Designated Entity deems appropriate.”


4.5 FEES AND BONUSES: “Before, on or after the signing of the Production Sharing Agreement under this Agreement, the Contractor shall not be obliged to pay to the Federal Government any signature bonus, development bonus, production bonus and any other bonus whatsoever for the fulfilment of its obligations under the Production Sharing Agreement under this Agreement. Before, on or after the signing of the Production Sharing Agreement under this Agreement, the Contractor shall not be obliged to pay to the Federal Government any surface fees and administrative fees. The amounts payable by the Contractor under the community fund and training fund shall become part of, be considered as and be included in Contractor's expenditures for the fulfilment of the minimum expenditure obligation and shall be included in Petroleum costs for the purpose of cost recovery under the Production Sharing Agreement signed under this Agreement.”


4.6 ROYALTY: “The Federal Government shall own and be entitled to a royalty, if any, in cash or in kind up to five (5%) percent of production of all Petroleum produced and saved from the Contract Area. For greater certainty, the production does not include any Petroleum which is reinjected in the reservoirs or consumed for Petroleum Operations in the field.”


4.7 COST RECOVERY AND PRODUCTION SHARING: “The Contractor shall be entitled to recover the Petroleum costs incurred and paid by the Contractor pursuant to the provisions of the Production Sharing Agreement, by taking and separately disposing of an amount equal in value to a maximum of ninety percent (90%) of Crude Oil and ninety percent (90%) of Natural Gas produced from the Contract Area during that fiscal year and not used in Petroleum Operations after the payment of all royalties due to the government. Such cost recovery Petroleum is the "Cost Petroleum" consisting of two categories, the Cost Oil and the Cost Gas. To the extent that, in a fiscal year, the Petroleum costs that are recoverable are less than the maximum value of the Cost Petroleum, the excess shall become part of, and be included in the Profit Petroleum disaggregated into Profit Oil and Profit Gas. Crude Oil and Natural Gas production shall be respectively disaggregated into the Cost Oil and the Profit Oil (and the Cost Gas and the Profit Gas) for the Cost Petroleum and for the Profit Petroleum. The Contractor shall be entitled to Profit Oil and/or Profit Gas and/or Profit Petroleum that will be distributed according to the Production Sharing Agreement.”

4.8 DOMESTIC SUPPLY OBLIGATIONS AND SALE OF PRODUCTION: “The Contractor shall have the right to separately take, dispose, market, export at prices equivalent to international market prices for Crude Oil and Natural Gas of the same grade, gravity and quality prevailing at international markets on similar terms, all of the Cost Gas, Cost Oil, Profit Gas and Profit Oil to which it is entitled as is determined by the Production Sharing Agreement and to retain abroad all funds acquired by it including the proceeds of the sale of its share of exported Crude Oil and Natural Gas and proceeds of domestic sales of Crude Oil and Natural Gas.”

What a waste of time, this is literally publicly known stuff about the contract, and I see nothing out of the ordinary

If there was something sketchy in the contract Somali news channels would've picked up on it and milked it for a good week, you're not some kind of sherlock holmes with secret leaked files just give it up wlhi

 

[Supasta]

No ? They were sold 3 blocks which they are free to develop however they see fit thats it, they can buy more in the future tho

Youre desperatly trying to twist the words in the text Just put the baradho in the bag bro this is the worst fgs conspiracy theory Ive seen so far

No problem in this, contract area is still their blocks

What a waste of time, this is literally publicly known stuff about the contract, and I see nothing out of the ordinary

If there was something sketchy in the contract Somali news channels would've picked up on it and milked it for a good week, you're not some kind of sherlock holmes with secret leaked files just give it up wlhi

You’re incredibly ignorant, and you’re engaging in this conversation in bad faith by saying there’s nothing out of the ordinary.

Just look at article 4.4 We conceded to giving Turkey the sole right to set the percentage of its participating interest. This means Somalia does not reserve any carried interest. I doubt you know what carried interest means: it’s the guaranteed equity stake that gives Somalia ownership in the oil block. Only if Turkey decides to give it will Somalia have equity. Otherwise, Somalia misses out on any guaranteed share.

Most PSAs grant the host country a carried 10% at the very minimum or at least an option to participate after discovery (back-in rights). Here, by letting Turkey choose its percentage, Somalia effectively gave up the notion of a mandatory government share. Unless Turkey voluntarily gives us something, Somalia will have no equity stake. That’s insane and absurd.

This means all profit oil on the contractor side goes to Turkey and its chosen partners, aside from the government’s royalty or profit share. Somalia cannot earn additional profits as a stakeholder on top of royalty and tax. This is a lost economic opportunity and a lost chance for capacity-building. If Somalia hoped to insert its National Oil Company as a minor partner in each PSA to build technical capacity, it cannot require it. Only if TPAO voluntarily offers them a piece , and likely expects to be compensated for it or to carry them in a limited way on TPAO’s terms, could that happen. As a result, Somalia’s NOC and private sector are essentially cut out by default. This stunts local sector growth. Please tell me how this is ordinary.

This is extraordinarily bad. You will not find another country that gave such a concession. Full stop. Show me one oil contract agreement in the past 50 years that granted such terms. This is not ordinary at all. This is just getting started. It gets significantly worse. Go on with the mental gymnastics saying this is ordinary.

 

[Barkhadle1520]

You’re incredibly ignorant, and you’re engaging in this conversation in bad faith by saying there’s nothing out of the ordinary.

Just look at article 4.4 We conceded to giving Turkey the sole right to set the percentage of its participating interest. This means Somalia does not reserve any carried interest. I doubt you know what carried interest means: it’s the guaranteed equity stake that gives Somalia ownership in the oil block. Only if Turkey decides to give it will Somalia have equity. Otherwise, Somalia misses out on any guaranteed share.

Most PSAs grant the host country a carried 10% at the very minimum or at least an option to participate after discovery (back-in rights). Here, by letting Turkey choose its percentage, Somalia effectively gave up the notion of a mandatory government share. Unless Turkey voluntarily gives us something, Somalia will have no equity stake. That’s insane and absurd.

This means all profit oil on the contractor side goes to Turkey and its chosen partners, aside from the government’s royalty or profit share. Somalia cannot earn additional profits as a stakeholder on top of royalty and tax. This is a lost economic opportunity and a lost chance for capacity-building. If Somalia hoped to insert its National Oil Company as a minor partner in each PSA to build technical capacity, it cannot require it. Only if TPAO voluntarily offers them a piece , and likely expects to be compensated for it or to carry them in a limited way on TPAO’s terms, could that happen. As a result, Somalia’s NOC and private sector are essentially cut out by default. This stunts local sector growth. Please tell me how this is ordinary.

This is extraordinarily bad. You will not find another country that gave such a concession. Full stop. Show me one oil contract agreement in the past 50 years that granted such terms. This is not ordinary at all. This is just getting started. It gets significantly worse. Go on with the mental gymnastics saying this is ordinary.

Damn thats crazy