On September 2nd, the oil tanker MT Omair docked in Berbera port to unload 14,000 metric tons of diesel into Berbera oil terminals. According to Somaliland government officials, this is the largest shipment of fuel to ever arrive in Somaliland.
According to the Minister of Commerce, Industry and Tourism Hon. Mohamoud Hassan Saad (Saajin), the shipment of diesel belongs to Trafigura – an energy trading multinational conglomerate called and will resell the shipment to the fuel traders who previously imported their supplies individually.
the Minister of Commerce Hon. Mohamoud Hassan Saad (Saajin) stated that this is another major milestone in Somaliland’s effort to attract major companies to come and invest in the country and added that Trafigura as a company is larger than DP World.
Explaining Trafigura’s role in becoming Somaliland’s fuel supplier, the Minister of Commerce Hon. Mohamoud Hassan Saad (Saajin) stated that the company will be modernizing the fuel storage facility in Berbera.
The fuel market in Somaliland has been highly fragmented and subject to wild price swings and there has been an instance where contaminated fuel shipment affected thousands of vehicles.
When the ship arrived initially in Berbera, a different account of who owns the fuel was given to the media by the Berbera Port Manager Mr. Hassan Saeed Berbera oil terminals manager Hassan Ahmed Ibrahim (Embassy), both stated that the fuel delivered by MT. Omair was purchased by the Ethiopian government while the rest belongs to the Somaliland government.
Although it was widely speculated in the past few months that the Berbera Oil Terminals will be leased to Trafigura, this is the first time the Somaliland government has confirmed its deal with the multinational conglomerate’s take over of the Berbera fuel storage facilities and become Somaliland’s sole provider of petroleum products.
In August 2018, Somaliland President HE Muse Bihi Abdi has renationalized a number of assets that were managed by private companies. Berbera Oil Terminals previously managed by Berbera Oil Group was one of them.
It is unclear how long the government has been in talks with Trafigura to supply fuel to Somaliland and takeover the Berbera Oil Terminals but government officials have mentioned that the Somaliland government intends to import fuel and supply it to existing traders. It is unclear if the Trafigura deal is related to these previous statements.
There is no evidence that the agreement with Trafigura to manage Berbera Oil Terminals and supply fuel to Somaliland as announced by the Minister of Commerce Hon. Mohamoud Hassan Saad (Saajin) was ratified or approved by the Somaliland Parliament. In comparison, the deal with DP World to manage Berbera Port was ratified by parliament.
Trafigura has a checkered past and has had a number of scandals over the years, it has been found guilty of dumping toxic waste in Côte d’Ivoire that according to the government said claimed 16 lives and affected thousands with a multitude of health ailments. The company has since settled with the case with an undisclosed payout to 31,000 victims.
The Guardian reported in May that the company’s oil trading division may be under investigation for alleged market manipulation and corruption related to its oil trading activities.
The Somaliland government has in the past entered into agreements with shady or non-existence companies. Singapore New Silk Somaliland Energy CO LTD was one of those companies that the Somaliland government announced a major deal to build an oil refinery in Berbera and employ 400 National Service graduates. More than a year after the announcement, there is no activity on the supposed refinery.
It is unclear how much due diligence the Somaliland government has done to consider its dealings with Trafigura.
Officials from the Ministry of Commerce, Industry and Tourism as well as Berbera Oil Terminal and Port Authority did not return calls for details on the specifics of the agreement with Trafigura, the fuel it will import into Somaliland and its use of the oil terminal.
