By Abdirazak Ali Gesey
A historic agreement signed between Somalia and Turkey for the exploration and extraction of oil and natural gas has drawn considerable attention both at home and abroad.
While the deal is being celebrated as a strategic partnership by many, it has also triggered a wave of misinformation and public confusion.
Widely circulated reports claim that Somalia has “given away” its oil or that Turkey will take “90% of the revenue” — claims that don’t hold up under scrutiny. In this article, I break down what the agreement actually says, separating fact from fiction and offering a clear-eyed look at the clauses that matter.
Somalia Owns Its Resources — That Is Non-Negotiable
The agreement unambiguously states that all oil and gas resources within Somalia’s land and maritime territory remain the sovereign property of the Somali people.
The deal introduces no changes to this fundamental principle.
Turkey — specifically its state oil company, Turkish Petroleum Corporation (TPAO) — has not been granted ownership of any Somali oil. Rather, TPAO is contracted to conduct exploration and production operations. Ownership remains entirely with Somalia.
Understanding the “90%” Clause — It’s Not What You Think
Much of the controversy centers around a provision that allows the operator (TPAO) to recover up to 90% of annual production value. Some media, including the Nordic Monitor — a platform run by exiled Turkish opposition journalists — have misinterpreted this as Turkey receiving 90% of Somalia’s oil revenue.
In reality, this clause refers to cost recovery. The operator is allowed to recoup its substantial investments — covering seismic surveys, offshore drilling, equipment, and operational expenses — from up to 90% of the annual output.
Once costs are recovered, the remaining oil (known as profit petroleum) is shared between Somalia and the operator, in line with international industry norms.
Additionally, Somalia is entitled to receive a royalty of up to 5% from day one of production — even before cost recovery is complete.
Time-Limited and Structured for Oversight
The agreement is initially valid for five years, with automatic three-year renewals unless either party opts out with at least six months’ notice.
This framework ensures that Somalia retains flexibility and negotiating power, especially if the deal proves suboptimal in the long term.
Why Somalia Chose a Cost-Recovery Model
Offshore oil exploration is prohibitively expensive. Drilling a single deep-water well can exceed $100 million. Somalia, like many developing countries (e.g., Uganda, Mozambique, Ghana), lacks the capital and technical capacity to undertake such high-risk ventures independently.
The cost-recovery model enables Somalia to attract foreign investment without assuming financial risk — while still maintaining full ownership and control over its natural resources. Without such a framework, much of the country’s potential wealth could remain untapped for decades.
False Narratives vs. Documented Facts
Several falsehoods are being promoted. Let’s set the record straight:
“Turkey gets 90% of Somalia’s oil revenue.”
False. The 90% refers only to cost recovery. It does not apply to profit-sharing or ownership.
“Somalia has handed over its oil rights.”
False. Ownership remains fully with Somalia. TPAO is an operator — not a rights holder.
“Somalia only gets 10%.”
False. That 10% figure is a misreading of cost-recovery limits. Somalia receives royalty payments from the start and shares in post-cost profits.
What Somalia Gains from the Deal
- Early revenue via royalty payments.
- No financial risk for exploration and drilling.
- Retention of full resource ownership.
- Technology transfer, skill development, and job creation in the Somali energy sector.
A Deal That Demands Transparency and Vigilance
This agreement marks an important moment in Somalia’s economic trajectory, offering an opportunity to unlock long-dormant energy potential.
However, its success depends entirely on how it is managed — by both the government and its partners.
While the deal outlines mechanisms that protect Somalia’s sovereignty and promise fair revenue-sharing, much will hinge on implementation, transparency, and independent oversight. Public trust will only be earned if the process is open, inclusive, and accountable.
The agreement is not without risk, but it is also not the reckless giveaway some critics claim.
Only time will tell whether this partnership delivers on its promise. For now, the facts should speak louder than fear.
