The Oil deal isn't that bad

[Momo7]

The deal itself is not bad, but 3 things make it very bad and dangerous. The cost recovery period is not capped, the turks can drag it indefinitely by adding endless over priced ghost costs, eg. Security, damage, environmental protection, administration, salaries inflating the whole operation costs to its limit like saying a pen costs 300 dollars. And then there’s the lack of oversight from Somalia, they can extract 5 billion barrels and no one will have a clue or damage the environment very bad and nobody will notice until a catastrophe happens. And the worst part is the deal is above the Somali legal system and that any dispute should be settled by Istanbul court.
Even a kid can understand this is a very dangerous deal

 

[Barkhadle1520]

The deal itself is not bad, but 3 things make it very bad and dangerous. The cost recovery period is not capped, the turks can drag it indefinitely by adding endless over priced ghost costs, eg. Security, damage, environmental protection, administration, salaries inflating the whole operation costs to its limit like saying a pen costs 300 dollars. And then there’s the lack of oversight from Somalia, they can extract 5 billion barrels and no one will have a clue or damage the environment very bad and nobody will notice until a catastrophe happens. And the worst part is the deal is above the Somali legal system and that any dispute should be settled by Istanbul court.
Even a kid can understand this is a very dangerous deal

Yeah our only hope relies in the fact that the Turks will view Somalia as a potential very good client and ally. The recent helicopters delivery reinforces this idea but only time will tell.

 

[Midas]

We should wait and see what happens. Neither government has made public statements or comments about what the actual deal entails. I haven't seen any online news sites, other than Nordic Monitor, address the supposed government document. There should be a greater push for transparency. Something so opaque shouldn't be discussed like it's legitimate.


But if you ask me , with the FGS and also all the regional states in general . I believe they would benefit more from mining if they focused on that first to build revenue streams. Like, create a state owned company that works with private local ones and takes a big chunk of the profit. Plus, the local ones would pay taxes. They could potentially generate large amounts of revenue in less time, with less outside investment, compared to gas or oil.

A few local companies are already trying to get permits and licenses to start:

targets to acquire mining, oil & gas licenses and permits for mineral exploration – SAHAN MINING COMPANY

sahanmining.com

Energy and Mining – ADCO Group Of Companies

adcosomalia.com

There is even a gold mining company recently set up:

View attachment 363549
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#sahan | Hanad Derie Farah

there is wealth where minerals are in, and that wealth is abundance below the surface of my country Somalia dig below the surface and extract the wealth #Sahan gold corp, join us

www.linkedin.com

Think about it deeply. Oil and gas requires:
Huge capital, high security, offshore logistics, decades-long timelines.

Whereas mining is:
Cheaper to start, faster to produce, less geopolitically entangled, and often more accessible to local companies.

And also unlike oil , mining doesn't require FPSOs, deepwater rigs, or naval security infrastructure.

To put it in perspective how lucrative mining can be:
Australia’s mining industry generated $445 billion in 2023. Israel pulled in $43.6 billion last year.

Somalia has gold, tin, silver, uranium, bauxite, and rare earths , all of which could be tapped through domestic partnerships with far less risk.

Somalis should start with sectors where local control is possible and timelines are shorter.

Think about the broader picture: what if the FGS created a state mining company that worked with Somali private firms?

No need for massive foreign military protection.
No 90% cost recovery clauses.
No arbitration in Istanbul.

Just Somali led industry.

I think for truly massive revenues that the govt gets we need oil . But the mining industry has boomed like crazy recently.

Gold exports went from 37 million in 2015 to 315 million in 2023 . Although the fact that the only buyer is the uae is concerning

 

[Idilinaa]

I think for truly massive revenues that the govt gets we need oil . But the mining industry has boomed like crazy recently.

Gold exports went from 37 million in 2015 to 315 million in 2023 . Although the fact that the only buyer is the uae is concerning

View attachment 363714View attachment 363715

The thing about oil is that it’s deeply wrapped in geopolitics, legal disputes, and long term contracts, it could take years before we see tangible benefits or consistent revenues from it. So while it holds massive potential, it’s not an immediate solution.

As for gold the UAE especially Dubai has long been a hub for the gold trade and many Somali traders operate shops in the Suuq Dahab (The largest Gold Market in the world) there. That historical and business connection explains why the UAE remains the primary export destination

That said it would be strategic to diversify export destinations over time. The new gold market being set up in Eastleigh is a great step in that direction and Somalia should also aim to develop its own domestic gold trading infrastructure in the major cities. But realistically, Dubai will likely remain a key node in the trade because of its high liquidity(large numbers of wealthy international buyers), global connections, and the presence of Somali businesses and networks.

 

[Midas]

The thing about oil is that it’s deeply wrapped in geopolitics, legal disputes, and long term contracts, it could take years before we see tangible benefits or consistent revenues from it. So while it holds massive potential, it’s not an immediate solution.

As for gold the UAE especially Dubai has long been a hub for the gold trade and many Somali traders operate shops in the Suuq Dahab (The largest Gold Market in the world) there. That historical and business connection explains why the UAE remains the primary export destination

That said it would be strategic to diversify export destinations over time. The new gold market being set up in Eastleigh is a great step in that direction and Somalia should also aim to develop its own domestic gold trading infrastructure in the major cities. But realistically, Dubai will likely remain a key node in the trade because of its high liquidity(large numbers of wealthy international buyers), global connections, and the presence of Somali businesses and networks.

True. I think we have already started to experience some of rhe benefits from increasing mining exports. I waa taking to a relativ yesterday about this small town back home I visited one summer several years ago. At the time there was almost nothing in the town no real restaurant or supermarkets or even that many cars. But fast forward 7 years later. They told me that even in this small town people are using mobile apps to order taxis and there all these new restaurants and supermarkets all over. Even the tiny shacks that used to be everywhere are gone now apparently.


This was exactly an example of what we've been talking about over the last couple days. There has been a huge sea of changes happening all over Somalia at the level of the small town over rhe last 7 years that have transformed the entire country. There are probably hundreds of small towns in somalia that in 2016 didnt have 24 hour electricites or restaurants or taxis or dozens of other small amenities.

 

[Barkhadle1520]

Update: I was right, the contract will only last 5 years and by 2029 Somalia will earn the 70%. Turkey's Fatih drilling ship set to depart from Turkey to Somalia in the coming months. 5 years is insane considering other countries signed decades long contracts, that's the benefits of 90% recovery cost.

https://hornpulse.com/2025/04/24/pe...unity-to-become-a-petroleum-producing-nation/

 

[Momo7]

Update: I was right, the contract will only last 5 years and by 2029 Somalia will earn the 70%. Turkey's Fatih drilling ship set to depart from Turkey to Somalia in the coming months. 5 years is insane considering other countries signed decades long contracts, that's the benefits of 90% recovery cost.

https://hornpulse.com/2025/04/24/pe...unity-to-become-a-petroleum-producing-nation/

so your prove is some unknown site owned by nobody?

somalis are their own enemies wlhi

 

[Barkhadle1520]

so your prove is some unknown site owned by nobody?

somalis are their own enemies wlhi

Here is the interview hoyada la janee

https://x.com/hornpulsemedia/status/1915488635341971895

 

[Idilinaa]

so your prove is some unknown site owned by nobody?

somalis are their own enemies wlhi

The article is accurate, its from a video interview of the former minister , i saw it a while back. But as far as i know the current minister of Petroleum and Mineral Resources hasn't commented on the specifics of the deal yet and it entails.

One of the most important clarifications comes from Eng. Dhoomey:s @Barkhadle1520 @Midas

Dhoomey clarified that the signed document is a framework agreement, not yet a Production Sharing Agreement (PSA). He noted that the actual PSA will be a comprehensive contract exceeding 200 pages, unlike the current 14-page framework which only outlines general principles.

That explains why there hasn’t been much official commentary or clarity from the government , there’s no full contract yet. So in a way, I stand by what I said earlier. It makes sense to wait and see before drawing conclusions because the real terms are still being negotiated.

That said, based on what we know so far, the framework raises serious concerns:

- There's no public oversight or transparency

- The 5% royalty and 90% cost recovery model is heavily tilted in favor of the foreign investor(Turkey)

- And there’s no clear public timeline or guarantees for Somalia’s actual financial benefit