Response to United Nations Somalia and Eritrea Monitoring Group comments on Capacity Building Agreement

3 August 2015

Soma Oil & Gas Holdings Limited
(Company No. 08506858)
Soma Oil & Gas Exploration Limited
(Company No. 8619726)
Soma Management Limited
(Company No. 8619760)

(together Soma or the Company)

Response to United Nations Somalia and Eritrea Monitoring Group comments on Capacity Building Agreement

The United Nations Somalia and Eritrea Monitoring Group (UNSEMG) has fundamentally misunderstood the nature, purpose and destination of the payments made under the terms of the Capacity Building Agreement (CBA) signed by Soma Oil & Gas (Soma) and the Federal Government of the Republic of Somalia (the Somali Government).

The CBA was entered into at the request of the Somali Government to provide the much needed resources, technical capacity and infrastructure to support the Seismic Option Agreement (SOA). The broad terms of the CBA were published by Soma in 2014 and have been published in full by the Somali Government on its website. The SOA also provides for the creation of a Data Room in Mogadishu, which has been funded by Soma at the request of the Somali Government.

All payments pursuant to the CBA and relating to the Data Room were made directly to the Somali Government following appropriate due diligence and the implementation of various legal safeguards pursuant to independent legal advice provided to the Company. Soma has never made payments to individual government officials. Furthermore, the CBA provides for all payments to be offset against future monies due to the Government of Somalia under potential PSAs.

The decision to award the SOA to Soma was approved by the Council of Ministers of the Somali Government. No person involved in the CBA programme was, or is, in a position to influence the decision to grant any commercial agreements for the benefit of Soma.

No conflict of interest arises in relation to the legal advice given by Jay Park QC of Petroleum Regimes Advisory (PRA). PRA provided advice to the Somali Government between June 2013 and October 2014 relating to the SOA. Soma agreed to the Somali Governments request to pay these fees and did so after taking legal advice which confirmed that it was appropriate to do so. PRA provided the Somali Government with independent legal advice and owed a duty solely to them in the provision of that advice.

Any suggestion that any of the payments to the Somali Government or to PRA were improper, unlawful or gave rise to a conflict of interest is incorrect and defamatory. Soma has always conducted its business in a completely lawful and ethical manner and will take all appropriate steps to protect its reputation.

www.somaoilandgas.com

FTI Consulting+44 (0) 203 727 1000
Ben Brewerton, Sara Powell somaoilandgas.sc@fticonsulting.com

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