Institution Ministry of Petroleum Directorate of Petroleum Role

Institution Ministry of Petroleum – Directorate of Petroleum Role and responsibility • Policy • Legislation • Licensing • SONOC oversight The Somali • The petroleum regulator Petroleum • Technical/HSE compliance and oversight Directorate/So • Information / analysis mali Petroleum Authority (SPA) Somali • Commercial operations National Oil • Government take/participation

Mining Authority/Directorate � Legislation �The Mining regulator � Licensing �Technical/HSE compliance � Oversight on National �Information/ Analysis Mining Company � NAMCO (NAMCO) �Commercial operations � Somali Geological �Government Survey (SGS) take/participation �Granting rights on behalf of Ministry � Ministry of Finance �Tax policy Institutions - Ministry Other institutions � Inland revenue department �Tax collection � Policy � Somali

� International law � Constitution � Petroleum Law 2017 � Petroleum regulations � Petroleum contracts Petroleum � International law � Constitution � Mining Code 2017 � Mining regulations � Mining contracts Mining

Exclusive licenses PSAs Risk service contracts • Signature and production bonuses • Royalties • Signature and production bonuses • All hydrocarbons (subject to take-in -kind right of IOC) • Surface rentals • Training • Community developments • Tax, including: o Income o Capital gains on transfer • Surface rentals • Training • Community developments • Tax, including: o Income (unless included in Gov. share of profit oil) • Royalties Tax, including: o Income o Capital gains on transfer

� Participating interest 30% max (negotiable) � Signature bonus (per block/PSA) 0. 5 M � Training fee (per annum) 0. 5 M � Community payments, E&P 0. 5 M � Surface rental (pa) for first 3 years, USD 10/Km² � Surface rentals (pa) for first 2 years, USD 20/Km²

� Cost recovery oil 70% max (cap) � Profit sharing, using R-factor: o During cost recovery period: R < 1= 15% o 1<R>2 (R is between 1 and 2) = o During profit oil R > 2= 75% sliding up � Depreciation 1 year � Uplift 15% � Uplift timeframe 5 years

Federal Member States Puntland Galmudug Mineral Potential 1. Majiyahan deposit of tantalum (tin), Nb, gold (Au) and silver. 2. Dhurbo coal deposits (Two sites). 3. Qandala lead and silver deposit with zinc, iron and copper. 4. The salts of Hafun and gemstones 1. The sepiolite, bentonite, kaolinite and potash of El Bur 2. The salts, including lithium brines of Hinlabi, Warshuba and Ba’ad Weyn 3. Calcrete uranium deposits of Mirig, Wabo, Adado and Galinsor 4. Brown coal (Lignite) and black coal deposit are

SW State 1. Primary uranium at Alio Ghelle 2. The apatites (phosphorites) of Modu Mode 3. The iron ore of Bur Qalin and Daimir, near Dinsor; in addition to Mn deposit associated with the Fe ore. 4. Granite, marble at Lego near Balli Dogle and gem-stones in the Dooy 5. Rare Earth Elements (REE) in the coastal sand dunes near Marka 6. Coal (black coal) resource at Hawaay, west of Barawe 7. Ag and Au east of Bardhere; and Cu and Phosphorites SW of Dinsor. 8. Kaolinite and silica sand deposits is found in the red/white sands, near Marka 9. Limestone, clay and gypsum for cement at Markabley and Bur Anole, south of Bardhere Jubbaland 1. Fe ore near El Wak (The Russian report) 2. The black sand deposits of Kismayo: magnetite,

Somaliland (? ) 1. Piezo-quartz and feldspar pegmatite's and Muscovites in Lafarug and Da’ar Buluk. There is potential for Lithium mining. 2. Gold and Pt in Arabsiya, Gabiley, Baki and Borame. 3. Base metal deposits: Cu and Zn 4. Cassiterite-bearing quartz veins in the Inda Ad Series of Sanag 5. Molybdenum, Columbite and beryllium – bearing quartz veins and pegmatites in the western part of the Golis Range. 6. Coal and lignite: Coal deposits with ages from Jurassic to Oligocene –Mionce occur in Hed-Hed , north of Las Dureh, Southeast of Berbera 7. Gypsum-anhydrite deposit near Berbara 8. Beryl group gemstones, opal, tourmaline, amethyst, quartz, ruby and sapphires.

� Mining policy � Mining Regulation � Model Mining Exploration and Development Template � Mining Code Review � Mining management and revenue sharing

� Royalty of 5% � Export tax at 2. 0% of net value � Surface rents � Corporate income tax � Minimum work commitment � Local community development