Review of the Legal, Regulatory and Fiscal Framework of Somalia for the Petroleum Sector

The World Bank has contracted with Gide Loyrette Nouel (‘Gide’ or the ‘Consultant’) for the provision of consultancy services with respect to the review of the legal, regulatory and fiscal framework of Somalia for the petroleum sector (the ‘Assignment’). Gide is assisted by Fiduciaire France Afrique (FFA Conseil) (‘EY Counsel’), member of the Ernst and Young Group, for the fiscal, accounting and financial aspects of the Assignment. Somalia is one of the most promising East African countries with respect to oil and gas discoveries, as underlined by the Heritage Institute for Policy Studies in 20142. Somalia also faces challenges in developing of the petroleum sector as regards to its political and security situations. Indeed, some of the regions have declared their independence (Somaliland) and have awarded exploration licenses (Somaliland and Puntland). Any oil or gas discovery in this respect is likely to catalyze an already tense political situation and enhance chance for renewed conflict. The main objective of the Assignment is to review the petroleum legal, regulatory and fiscal framework for the Federal Republic of Somalia to build a foundation for a federal approach to the development of natural resources. The petroleum legal framework should be in line with the Provisional Constitution (including potential amendments) and with international practices and will have to recognize both the principles of federation and decentralization. The Assignment is conducted in parallel with the Constitution revision process and the Consultative Process, and the Consultant and the World Bank liaise in this respect to communicate respective result of the ongoing processes.