Turkey has made a significant breakthrough in its energy exploration efforts in East Africa, announcing that two of the three oil blocks it operates in the region have yielded commercially viable reserves.
- Turkey discovered commercially viable crude oil reserves in East Africa, estimated at 20 billion barrels.
- Concern rises over Somalia’s limited revenue and lack of control over financial flows as Turkey gains sweeping operational and economic privileges.
- Somalia’s President defended the agreement, citing its potential to kick-start exploration along Somalia’s coastal areas and Turkey’s commitment to invest.
These discoveries estimated to contain up to 20 billion barrels of commercially viable crude oil, represent a major turning point in Turkey’s growing interest in Somalia and the broader East African energy landscape.
The Somali Guardian reports that while the two pilot oil blocks have made significant yields, the third block is still being explored and is expected to yield commercial oil quantity by August.
The discovery comes amid reports of a shared oil development agreement signed between the Somali government and Turkey last month.
The deal grants Turkey about 90% rights of oil and gas output, laying the groundwork for long-term energy cooperation between the two countries.
Turkey’s oil deal with Somalia
Somalia’s strategic maritime position and vast energy reserves — estimated at 6 billion cubic meters of natural gas and up to 30 billion barrels of offshore oil — have made it a priority for Turkey’s expanding energy ambitions.
A bilateral hydrocarbon agreement, signed on March 7, 2024, in Istanbul by Turkish Energy Minister Alparslan Bayraktar and Somali Petroleum Minister Abdirizak Omar Mohamed, has drawn attention for its unusually favourable terms for Turkey.
The deal exempts Turkish entities from paying standard upfront costs such as signature bonuses and administrative fees, effectively giving Turkey free access to Somali hydrocarbon blocks.
More strikingly, Turkey can recover up to 90% of annual oil and gas production as “cost petroleum” before sharing any profits — a percentage far above international norms. Somalia’s revenue is further limited by a modest 5% royalty cap, which excludes petroleum used or reinjected during operations.
Turkey also secured full rights to export its share of hydrocarbons at global market prices and retain all earnings abroad, cutting Somalia out of any control over the financial flows.
Additionally, Turkey is allowed to transfer its rights to third parties without local oversight or the need to establish a presence in Somalia.
In essence, the agreement grants Turkey sweeping economic and operational control, raising concerns about Somalia’s long-term benefit from the exploitation of its own energy resources.
Somalia defends controversial deal
In response to the widespread criticism surrounding the deal, Somalia’s President Hassan Sheikh Mohamud has defended the agreement, highlighting its potential benefits for the country.
While Somalia is not yet recognized as an oil-producing nation, geo-seismic surveys indicate the country could possess as much as 30 billion barrels of oil and gas reserves.
Unlocking these resources will be a long-term process, as thorough exploration usually takes three to five years, with production commencing only after that stage is complete.
Before the collapse of central governance in 1991, major international oil and gas firms had signed exploration deals in Somalia, but those companies pulled out amid the onset of civil war and prolonged instability.
According to President Mohamud, the partnership with Turkey is a historic milestone that will kick-start official exploration of Somalia’s untapped energy sector.
“Oil exploration is already happening offshore,” he said. “Now, with this deal, exploration will begin along Somalia’s coastal areas.”
He emphasized that Turkey wasn’t given preferential treatment, but rather was the first to demonstrate a genuine commitment to investing in Somalia.
“This is not about favoring Turkey,” he added. “Rather, Turkey is the first to step up and show real commitment to invest.”
