Turkey discovers 20 billion barrels of oil in Somalia

Turkey has discovered an estimated 20 billion barrels of commercially viable crude oil in East Africa, marking a significant expansion of its energy footprint in the region. The oil find, located in Somalia, is part of a broader energy development deal signed between the two nations last month.

The Somali Guardian reports that two of the three pilot oil blocks have already shown strong yields. The third block is under exploration and is expected to deliver commercially viable output by August.

A Controversial Agreement

The oil discovery follows the signing of a bilateral hydrocarbon deal on March 7, 2024, in Istanbul. Turkish Energy Minister Alparslan Bayraktar and Somali Petroleum Minister Abdirizak Omar Mohamed agreed on terms that critics say heavily favor Turkey.

The deal grants Turkish companies 90% of the oil and gas output. Turkey is also exempt from upfront fees such as signature bonuses and administrative costs. Additionally, the agreement allows Turkey to recover nearly all of its production costs before any profit-sharing with Somalia begins.

Somalia’s royalties are capped at 5%, and Turkey retains full rights to export its share of hydrocarbons and keep earnings abroad. Turkish firms can even transfer these rights to third parties without oversight or requiring a physical presence in Somalia.

Growing Concerns Over Somalia’s Gains

Analysts and civil society groups have raised alarms about Somalia’s limited revenue potential and lack of control over financial flows stemming from the deal.

Despite the criticism, President Hassan Sheikh Mohamud has defended the agreement. He argues that it represents a strategic move to jumpstart exploration along Somalia’s coast and unlock untapped reserves — believed to total up to 30 billion barrels of oil and gas.

“Oil exploration is already happening offshore. Now, with this deal, exploration will begin along Somalia’s coastal areas,” Mohamud said.

He dismissed claims of preferential treatment toward Turkey, emphasizing that Turkey was the first nation to make a serious investment offer. “This is not about favoring Turkey,” he stated. “Rather, Turkey is the first to step up and show real commitment to invest.”

While Somalia is not yet an oil-producing country, the deal could shift its future economic trajectory. However, questions remain about whether the nation will ultimately benefit from its own natural resources or become sidelined in its exploitation.