Turkiye’s ambitions in the Horn of Africa have taken a significant leap with a hydrocarbons agreement granting Ankara extensive control over Somalia’s oil and gas exploration. While Somali and Turkish officials tout the deal as a landmark step towards energy development, critics warn it marks a troubling erosion of Somalia’s resource sovereignty.

The hydrocarbon exploration and production agreement was signed on 7 March 2024 in Istanbul by the energy ministers of Somalia and Turkiye, against the backdrop of escalating tensions between Somalia and Ethiopia over the latter’s controversial maritime deal with Somaliland.

Turkish Petroleum Corporation gets exclusive rights

However, the full scope of the agreement did not come to light until this week, when the text was submitted to the Turkish parliament for ratification. According to leaked documents obtained by Nordic Monitor, the deal grants Turkish Petroleum Corporation (TPAO) exclusive rights to explore and produce oil and gas in three Somali offshore blocks spanning 16,000km².

Somalia’s resource potential is significant. The country is estimated to hold around 6 billion cubic metres of proven natural gas reserves and up to 30 billion barrels of offshore hydrocarbon potential.

The 11-page agreement presents itself as a symbol of “deep relations and close friendship” between Turkiye and Somalia, aiming to intensify cooperation in the hydrocarbon sector on the basis of “equality, mutual respect and reciprocal benefits”.

It affirms Somalia’s sovereign ownership of its natural resources and acknowledges the federal government’s authority to issue licences and enter into production-sharing agreements. Yet for many Somali analysts, the document reads less like a blueprint for cooperation and more like a quiet surrender of control.

The agreement names Turkiye’s state-owned TPAO as the lead operator, granting it sweeping authority to finance, manage and recover costs from oil and gas projects across Somalia’s underexplored reserves. While Somalia retains formal ownership of its resources, critics argue that the balance of power skews heavily toward Ankara, raising questions about oversight, accountability and whether the deal serves Somali interests.

Not looking good on paper

In the pact, Turkiye is to recover up to 90% of annual oil and gas output as “cost petroleum”, a common industry practice known as cost recovery and designed to reimburse the operator for exploration and development expenses. Yet critics are sceptical of the scale of the recovery and the absence of standard fees and bonuses.

This is not just a poor deal, it is a historic failure of governance

Leaked details of the agreement have only deepened concerns.

• TPAO is exempt from paying any signing, development or production bonuses.
• It is not required to pay surface rental or administrative fees, concessions energy analysts say are rarely granted in comparable deals.
• Any disputes are to be resolved in Istanbul, not in Mogadishu or through international arbitration.
• The agreement also includes a controversial clause requiring Somalia to compensate Turkiye for potential losses if it changes national laws on taxation, the environment or regulation.
• Somalia, under the current terms, will receive 5% of production revenues, but only if oil is discovered and extracted.

Critics have been swift and scathing. Abduqadir Yusuf, a Somali engineer and adviser to the Ministry of Environment and Climate Change, described the Turkiye-Somalia agreement as “the worst ever signed by a sovereign nation”. In a post on X, he accused the government of “stripping Somalia of its rights, its resources and its sovereignty” and called for the deal’s immediate cancellation.

“No sovereign country should ever agree to such terms,” Yusuf said. “The foreign partner takes the oil, sets the costs, runs operations, settles disputes on its soil and even demands compensation if national laws change. This is not just a poor deal, it is a historic failure of governance.”

Is this a neo-colonial resource grab?

Other critics have gone further, calling the deal a neo-colonial resource grab disguised as development cooperation. They say it echoes exploitative arrangements historically imposed on fragile states, pointing to the alleged lack of a competitive bidding process, restrictive lock-in clauses and a dispute resolution mechanism that places legal authority in Turkiye rather than Somalia.

Not everyone sees the agreement through a neo-colonial lens. Horn of Africa analyst Moustafa Ahmad argues such critiques risk erasing the political agency of Somali President Hassan Sheikh Mohamud and his administration. “Timing is telling,” Ahmad tells The Africa Report.

“The president has used tensions with Ethiopia over the Somaliland MoU to push for this agreement, alongside the controversial constitutional reforms he managed to pass through parliament,” he adds.

Framed domestically, the deal is being positioned as a sovereign act of self-defence, “something helpful to Somalia amid threats against its sovereignty”.

‘Misleading and inaccurate claims’

Turkish analyst Tunç Demirta? dismisses the mounting criticism as “misleading and inaccurate”, accusing detractors of distorting the facts to undermine what he calls a decade-old partnership built on mutual respect.

“Turkiye has no interest in owning Somali resources. It never has,” he says. “Since 2011, our focus has not been what lies beneath the ground, but who lives above it: the Somali people.”

There is no clause in this agreement that gives Turkiye a share of the oil as profit

Demirta? emphasises that the widely criticised ‘90%’ clause is not about profit-sharing, but a standard cost-recovery mechanism.

“TPAO invests in exploring and extracting the oil. That means they spend money first, a lot of it, and they recover those costs from the oil that is found, if it is found. That’s where the 90% figure comes in. This portion goes to the contractor to cover expenses. It does not go to the Turkish government or any other institution in Turkiye.”

While TPAO recovers its upfront exploration costs from initial oil output, Demirta? says any remaining oil – and any profits – belong to Somalia. He adds that even if the venture proves unprofitable, Somalia is guaranteed a 5% share of the output’s value. This, he says, is a protective clause to ensure Somalia gains something no matter what.

Demirta?, a political and international relations analyst with close ties to the Turkish government, adds that the agreement is grounded in international norms.

“There is no clause in this agreement that gives Turkiye a share of the oil as profit,” he says. “This agreement is based on frameworks used widely around the world. There are no special privileges or unfair advantages granted to Turkiye in any way.”

Uncertainty over what will happen next

Somali officials have defended the agreement, portraying Turkiye as a dependable ally that has invested heavily in the country’s infrastructure, health, education and security sectors since 2011. But mounting calls for transparency suggest the deal may face further scrutiny in the weeks ahead.

Ahmad says public backlash alone is unlikely to halt the deal’s implementation. Instead, he points to Somalia’s volatile political transition as the more pressing risk. The president is pushing for a shift to direct elections, an electoral model that faces strong opposition from key political actors.

“Without a clear resolution of the electoral impasse, Turkiye’s engagement will likely shift to a wait-and-see approach,” Ahmad says.

Security risks compound the uncertainty. Ahmad warns that while offshore operations may be out of reach, jihadist group Al-Shabaab could still disrupt exploration by targeting shore-based infrastructure and personnel.

“Al-Shabaab can’t threaten offshore drilling but they can certainly pose a threat to coastal logistics and base workers,” Ahmad says, suggesting the deployment of Turkish special forces in Somalia may be tied to pre-empting such disruptions.