Ismail D. Osman: Somalia has hit the jackpot in oil deal with Turkey

Listening to the loudest voices on social media, one might think Somalia has just handed away its oil wealth to Turkey. No competition, no upfront bonuses, and—perhaps the most alarming talking point—up to 90% of revenue going to Turkey.

It sounds like a disaster — until you read the deal, understand how frontier oil markets operate, and, most importantly, recognize Somalia’s starting point.

In reality, Somalia has secured one of the most strategic and forward-looking oil agreements in Africa’s modern energy history. It is a deal built on pragmatism, patience, and the long view — something far too many of the critics either ignore or don’t understand.

The biggest concern repeated by critics is the “90/10” cost recovery model. Yes, Turkey can recover up to 90% of initial revenues. But this isn’t Somalia giving away oil—it’s how virtually every frontier oil deal works. Turkey is putting its own capital at risk, not Somali money. Until Turkey recoups its investment, it takes a large share. But once those costs are paid back, Somalia’s profit share jumps dramatically: Somalia receives 70% of all future profits.

Compared to many established African oil producers, Somalia’s terms are excellent. Angola’s government share is about 60%. Nigeria’s is 55%. Ghana’s is around 58%. Somalia’s 70% profit share ranks among the most favourable on the continent. Ignoring this fact while criticising the early cost recovery period is misleading at best, dishonest at worst.

Another complaint is that Somalia negotiated no upfront bonuses. That’s true. But it’s also wise. Frontier markets with no prior oil production, high operational risks, and political instability cannot expect major oil companies to pay massive upfront sums. Requiring large cash payments before any oil is even discovered would have scared off serious investors.

Instead of chasing quick cash, Somalia focused on securing exploration, infrastructure, and long-term investment. This is the same model that launched Guyana’s oil boom. Somalia wisely chose to build lasting wealth rather than grabbing a short-term windfall.

Beyond revenue sharing, the Somalia-Turkey deal secures important benefits that critics barely mention. Somalia faces no financial risk: if the wells are dry or the projects fail, Somalia owes nothing. There are enforceable commitments to fund community projects and workforce training. Technology transfer is built into the agreement, so Somali engineers and institutions will gain valuable skills. Somalia maintains full sovereignty over all hydrocarbons — meaning ownership of the resources remains firmly with the Somali people.

Some critics argue Turkey can transfer its ownership interest without Somali consent, implying Somalia has lost control. That’s simply false. While Turkey may seek partners to finance or expand the projects — which is normal in large oil operations — Somalia retains full authority over the Production Sharing Agreement. New participants must abide by Somalia’s terms. Somalia’s sovereignty over its oil is not compromised.

“The critics who paint this as a giveaway are not helping Somalia. They are ignoring context, misleading the public, and feeding cynicism at a time when Somalia needs hope, clarity, and serious nation-building.”

Security has also been weaponised by critics. Yes, oil installations in Somalia need protection. But under this agreement, Turkey pays for its own security. Those costs are deducted from Turkey’s share, not Somalia’s. Somalia, in fact, gains robust military protection for vital infrastructure at no cost to its budget. In a country long vulnerable to attacks on key assets, this is a major strategic advantage.

Another misleading claim is that Somalia has no “equity” in its own oil because it isn’t investing money. This misunderstands carried interest — a powerful tool for resource-limited countries. Somalia gets a 70% share of the profits without having to invest millions or billions upfront. No debt, no risk, no exposure if things go wrong. Somalia’s model is smart and conservative.

Some also fear that legal stability clauses will hurt Somalia’s sovereignty. Under the agreement, if Somalia enacts new laws that unfairly damage the project, Turkey can seek compensation. But payments would come from Somalia’s oil revenue, not from taxpayers’ pockets. Far from undermining sovereignty, this clause ensures legal predictability — exactly what is needed to attract more investors and protect Somalia’s long-term energy ambitions.

Others claim that automatic renewals lock Somalia into a bad deal forever. Again, this is inaccurate. Somalia retains the right to cancel renewals according to clear terms. And protecting billion-dollar wells and infrastructure even after a PSA ends is standard industry practice. It ensures that investments are not abandoned midstream, safeguarding Somalia’s economic interests.

Critics often compare Somalia to rich oil states like Norway. But Somalia is not Norway — not yet. Somalia is a fragile country, recovering from thirty years of war, terrorism, poverty, and piracy. Its oil industry is not developed. Its institutions are still being rebuilt.

 

What Somalia needed — and what this deal offers — is a trusted strategic partner, risk-free investment, national infrastructure development, and a clear path to energy sovereignty. Turkey’s deep political, military, and economic ties to Somalia make it a uniquely reliable partner at this critical moment.

No deal is perfect. And of course, the Somali government must maintain strict oversight, transparency, and accountability as oil revenues start to flow. But rejecting this deal would have meant rejecting the first real chance Somalia has had in decades to transform its economy.

This agreement puts Somalia into the global energy conversation. It delivers investment, jobs, infrastructure, and future revenues without saddling Somalia with debt or unbearable risk. It preserves Somali sovereignty over its resources. It offers a smart, realistic path toward independence from aid and external dependency.

The critics who paint this as a giveaway are not helping Somalia. They are ignoring context, misleading the public, and feeding cynicism at a time when Somalia needs hope, clarity, and serious nation-building.

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Somalia is not giving away its oil. Somalia is finally, carefully, and strategically claiming it.

The future belongs to those who are willing to seize opportunity. This deal — while not perfect — is a historic step toward a future in which Somalia’s natural wealth truly benefits the Somali people.

 

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Maghrebi.org. Ismail D. Osman is Former Deputy Director of Somalia National Intelligence & Security Agency (NISA). He writes in Somalia, Horn of Africa Security and Geopolitical focusing on governance and security.

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