Somalia Emerges as Key Beneficiary in Landmark Hydrocarbon Deal with Turkey

In a breakthrough moment for East Africa’s energy landscape, the Somali Federal Government has secured what analysts are calling a highly favorable hydrocarbon agreement with Turkey. The deal, signed in Istanbul on March 7, 2024, and recently ratified by both governments, sets the stage for a long-term, sovereign-led energy partnership rooted in mutual benefit and respect for national ownership.

Somalia Retains Full Ownership and Licensing Power

One of the most consequential aspects of the agreement is the explicit recognition of Somalia’s full ownership of all its onshore and offshore oil and gas resources. The Somali government alone retains the authority to issue exploration and production licenses, reinforcing its sovereign control over natural wealth. Turkish participation—primarily through the Turkish Petroleum Corporation (TPAO)—will only proceed under Somali-issued Production Sharing Agreements.

No Signature Bonuses, Equal Terms, Local Gains

Crucially, the deal exempts Somalia from paying any signing bonuses, surface rentals, or administrative fees typically associated with international energy contracts. In addition, Somalia is entitled to receive up to 5% royalty in cash or in kind from all produced hydrocarbons. The agreement stipulates that cost recovery for Turkey’s operations is capped at 90%, with the remaining profit equitably shared.

Security, Arbitration, and Law Respect Somali Sovereignty

Security operations remain under the jurisdiction of the Somali government, with Turkish entities only allowed to adopt supplementary measures. Furthermore, all disputes will be resolved under international arbitration rules, with Istanbul designated as the venue—ensuring a neutral yet accessible platform.

A New Model for African Energy Partnerships

Experts see this agreement as a model for future African resource contracts, blending international investment with robust protections for national sovereignty and equitable revenue distribution. “It’s a new chapter not just for Somali energy, but for how African states can lead on resource governance,” said a Mogadishu-based legal analyst.

As Somalia begins to unlock the economic potential of its estimated 30 billion barrels of offshore hydrocarbons, the agreement with Turkey marks a shift away from exploitative models of the past—placing Somali interests firmly at the center of its energy future.