The Serious Fraud Office investigation into the firm chaired by former Conservative party leader Lord Howard of Lympne is expected to include payments it made to the Somali government as part of its unorthodox oil deal with the war-torn country.
Soma Oil and Gas was established in 2013 to exploit oil resources in the country which was emerging from decades of civil war.
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Controversy has never been far away from the deals struck between the company and the Somali government due to what critics have described as the opaque way in which Soma was granted the right to conduct offshore seismic tests for oil. Last week, it emerged that the Serious Fraud Office had searched Soma’s offices as part of an investigation into “allegations of corruption in Somalia”.
Soma said the SFO had told it “no suspicion whatsoever attaches to Lord Howard” but in the coming days he is expected to be questioned, accompanied by a lawyer.
The Independent understands that at the heart of the SFO probe will be a so-called Capacity Building Agreement under which Soma agreed to pay up to $400,000 to the government in Mogadishu to improve the oil ministry’s expertise. The offer, first made to cover 12 months from April 2014, was extended by a further $180,000 to September 2015.
However, concerns have been raised in Somalia that some of the money may essentially have gone directly to the pay packets of existing civil servants in the oil ministry – the same department which will make future licence decisions. That leaves open the potential for corruption allegations.
Soma has denied wrongdoing and sources said the Capacity Building Agreement money has enabled the oil ministry to employ experts including qualified geologists, geo-scientists and other professionals, adding that the agreement complied with Soma’s anti-bribery and corruption mandate. They said none of the recipients of the cash could influence the decision to grant any commercial deals to Soma.
The Capacity Building Agreement provided for Soma to pay up to six people a maximum of $5,000 a month each in what were termed “capacity support salaries”. It also stated that the ministry would have to make a written request to Soma for each payment, explaining why it was needed.
The issue of Soma’s influence on the fledgling Somali government has been a major source of concern which peaked when the Bloomberg news agency unearthed terms of a proposed deal that would give Soma as much as 90 per cent of future oil revenues from the country. Soma has said this was merely an early draft document.
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Global Witness, an NGO which has been investigating the Soma relationship, said: “There are concerns capacity building payments made by Soma Oil and Gas to staff in the Federal Government of Somalia could create substantial conflicts of interest.”
It pointed out the original deal to conduct seismic tests in return for first choice of a number of oil blocks was signed in August 2013, shortly after the UN Monitoring Group called for a moratorium on all new oil deals in the country, citing concerns they could fuel instability in a volatile region.
