Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004911 IMPLEMENTATION COMPLETION AND RESULTS REPORT < TF-A7805-SO > ON A SMALL GRANT IN THE AMOUNT OF USD (0.5) MILLION TO THE Federal Republic of Somalia FOR Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) March 1st 2021 Energy & Extractives Global Practice Africa East Region Regional Vice President: Hafez M. H. Ghanem Country Director: Keith E. Hansen Regional Director: Riccardo Puliti Practice Manager: Christopher Gilbert Sheldon Task Team Leader(s): Alexander Johannes Huurdeman, Matthias Mayr ICR Main Contributor: Inge Cécile van den Berg ABBREVIATIONS AND ACRONYMS BOE Barrel of Oil Equivalent EAFS External Assistance Fiduciary Section EGPS TF Extractives Global Programmatic Support Trust Fund FCV Fragility Conflict and Violence FGC Federal Government Committee FGS Federal Government of Somalia FMS Federal Member States FM Financial Management IBRD International Bank for Reconstruction and Development IDA International Development Association IOC International Oil Corporation MoMPR Ministry of Petroleum and Mineral Resources NCS National Communications Strategy PC Project Coordinator PMU Project Management Unit PSID Petroleum Sector Inclusive Development SESA Strategic Environmental and Social Assessment SPA Somalia Petroleum Authority TA Technical Assistance TOR Terms of Reference TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 4 II. OUTCOME ...................................................................................................................... 6 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME .................................. 8 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .... 9 V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 10 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 12 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 17 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 18 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P164175 Somali Petroleum Technical Assistance Project (SOPTAP) Country Financing Instrument Somalia Investment Project Financing Original EA Category Revised EA Category Organizations Borrower Implementing Agency Federal Republic of Somalia FGS Ministry of Petroleum and Mineral Resources Project Development Objective (PDO) Original PDO To strengthen the capacity of the Federal Government of Somalia to manage its petroleum sector. FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A7805 500,000 484,402 484,402 Total 500,000 484,402 484,402 Total Project Cost 500,000 484,402 484,402 Page 1 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) KEY DATES Approval Effectiveness Original Closing Actual Closing 07-Jun-2018 11-Jun-2018 31-Jul-2019 31-Dec-2020 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 02-Sep-2019 0.12 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule 04-May-2020 0.31 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 29-Dec-2018 Satisfactory Satisfactory 0.00 02 14-May-2020 Moderately Satisfactory Moderately Satisfactory 0.31 ADM STAFF Role At Approval At ICR Regional Vice President: Makhtar Diop Pablo Fajnzylber Country Director: Bella Deborah Mary Bird Keith E. Hansen Director: Hugh Riddell Kristina Svensson Practice Manager: Christopher Gilbert Sheldon Christopher Gilbert Sheldon Page 2 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Alexander Johannes Huurdeman, Alexander Johannes Task Team Leader(s): Matthias Mayr Huurdeman, Matthias Mayr ICR Contributing Author: Inge Cecile van den Berg Page 3 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context 1. Somalia and its international partners committed to align behind Somalia’s National Development Plan (NDP) for 2017-2020. The NDP was reinforced by the New Partnership for Somalia agreed at the London Conference in May 2017. It set priorities for national recovery and development, while this New Partnership agreement guided collective efforts through the next phase of Somalia’s transition out of conflict and fragility. The NDP outlined plans for developing an inclusive petroleum sector that contributes to future income streams and socio-economic development. The specific NDP target for the sector is “to build a robust institutional structure that consists of i) a Ministry that sets policies, ii) a Somalia Petroleum Authority (SPA) that regulates, and iii) a Somalia Petroleum Company (SPC) that represents the commercial interest of the state�. This small TA program contributes to item (i) and (ii). 2. Since the nineteen sixties petroleum prospectivity has been identified in Somalia. Even though no commercial discoveries have been made so far, regional geological trends and domestic data collection indicate the presence of petroleum resources in Somalia. Driven by observations of oil seeps to surface, exploration started in 1956. Some hydrocarbons were detected in onshore block 8. Thereafter, many major oil companies obtained concessions in the 1980’s. Following the fall of the Barré regime in 1991 due to civil unrest, these host agreements went into force majeure. Between 2001 and 2012 new licenses have been awarded by the Transitional National Government of Somalia as well as by the Federal Member States of Puntland, Galmudug and Somaliland. These licenses (partly) overlap with host agreements awarded before 1991. Over the course of 2012 - 2014 Somali officials met with international oil companies to discuss a possible timeline for their return. In the period 2012 up till 2018 small independents acquired some (additional) licensing interests and performed new geoscience data acquisition i.e. on - & (first deep water) offshore seismic surveys, seep analysis. Due to the 2014 oil price collapse and ongoing disputes between Federal Government of Somalia and Regional Governments, these activities sustained at low levels. These disputes were related to the legitimacy of host agreements. 3. Somalia’s perceived potential for future commercial petroleum discoveries, holds hopes for revenue streams that may contribute to the inclusive economic development of the country long term. Therefore, in 2014 the Federal Government of Somalia and its Member States embarked on a consultative process, (i) to harmonize issues related to ownership, control and revenue sharing of petroleum resources, and (ii) to modernize the legislative & fiscal framework. This effort was intermediated by the World Bank through the previous TA Program (Petroleum Sector Inclusive Development (PSID) P150467, 2014-19, BE). In 2016 concepts for Petroleum Bill, Model Petroleum Sharing Agreement, the first set of Upstream Regulations and a Federal Revenue Sharing Agreement were drafted. This led to the first Revenue Sharing Agreement (RSA) among Federal Government and Federal Member States, the Baidoa RSA in June 2018. It also drove the enactment of a new Petroleum Law in February 2020. In between these two important legislative milestones, in February 2019 the data packages of fifteen newly gazetted petroleum blocks were offered for sale to attract investors. This seismic survey data, financed by the FGS Ministry of Petroleum and Mineral Resources, was shot in 2015. In October 2019 Exxon and Royal Dutch Shell paid the retroactive rents for five legacy offshore blocks. Shortly after the approval of the new Petroleum Law, an Exploration & Production roadmap was signed between these two International Oil Companies (IOC) and the Federal Government of Somalia. Some Page 4 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) exploration blocks with participation from other IOC’s, are still in force majeure. Last August an exploration licensing round was launched for seven out of the fifteen gazetted blocks with an initial closure date of mid-March 2021. Following an extension, the licensing round is currently set to close on June 30th, 2021. 4. Due to historical political instability and a prolonged period of absence of major partners for Somalia’s development, the institutional structure of the petroleum sector is nascent. The new petroleum legislation provided more concrete guidance towards the institutional design of the sector. The Petroleum Bill stipulates that the ownership of natural resources belongs to all Somali people. The Somali people are represented by the Federal Government and the Federal Member States. The new Petroleum Act also states the mandate of, (i) a new Somali Petroleum Authority as regulatory entity, (ii) the Ministry of Petroleum and Mineral Resources as the policy maker, and (iii) the Somali Petroleum Company representing the commercial interest of the state. Plans for the creation of a Somali Petroleum Company have not been matured. The Somalia Petroleum Authority was set up in July 2020. So far, a first set of draft Upstream Regulations has not been endorsed by the Parliament. No plans have emerged for finalizing a comprehensive regulatory framework. The standardized commercial agreement (i.e. Model Petroleum Sharing Agreement) adopted for the ongoing licensing round has not externally been published. 5. With the outlook for starting exploration drilling upon offshore licensing bid award in Q3 2021, the level of policy and regulatory activity in the Federal Government of Somalia and the Federal Member States is expected to intensify. The petroleum industry affects multiple layers of the economy. Therefore, related investment decisions should be taken by the Government and its Member States in a consistent and strategic way, considering both near- and longer- term developments. International best practice institutional competences are crucial in order to close the valuable commercial petroleum deals whilst managing sustainable development and minimizing adverse environmental, health, and safety impacts. 6. The Somalia Petroleum Technical Assistance Project (SOPTAP) has been effective since June 11, 2018. All activities were fully implemented by the project closing date of December 31, 2020. The project has been financed by the Extractives Global Programmatic Support Trust Fund (TF0A7805-SO) (USD 0.5 million). The project closure date was extended twice; from December 31, 2019 to June 30, 2020 and from June 30, 2020 to December 31, 2020. The project has a final disbursement status of 97 % (USD 0.484 million). 7. Adequate financial management arrangements were put in place during the implementation of SOPTAP project by the Federal Government of Somalia. These arrangements were reporting and accounting provisions, internal control procedures, planning and budgeting, flow of funds arrangements, external audit reporting and accounting staff. All interim financial reports were submitted within the set deadlines (45 days after the end of each reporting quarter). One project audit was held covering the period up to December 31, 2019. Though the audit report was submitted late to the Bank, i.e. on December 11, 2020, the project received a clean audit opinion (unqualified). The Government is advised to implement all audit recommendations from this report, prior the next audit for the previous financial year, ending on December 31, 2020. The upcoming audit will be conducted by the Office of the Auditor General of the Federal Government of Somalia. The Client audit report together with the management letter, is expected to be submitted to the World Bank no later than June 30, 2021. Page 5 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Project Development Objectives (PDOs) The main objective of the project is to strengthen the capacity of the Government of Somalia to manage the petroleum sector. Key Expected Outcomes and Outcome Indicators (i) Somalia Petroleum Authority has the basic tools to start executing its mandate (ii) National Communications Strategy and Implementation plan for the upstream sector (iii) Building project management capacity within the Ministry of Petroleum and Mineral Resources Components COMPONENT A: Petroleum Sector - Reforms and Capacity Building The objective of Component A is to support strengthening the capacity of the institutions of the Federal Government of Somalia engaged in the development and governance of the petroleum sector, including through the following: Sub-component A.1 Petroleum Communication. The proposed sub-component will provide support to develop a National Communications Strategy (NCS) and implementation plan to empower a greater proportion of the Somali public to effectively participate in the ongoing dialogue on using the petroleum deposits as a source of national wealth and to build trust in government institutions. Sub-component A.2 Institutional Reforms. The proposed sub-component will provide support to the mandate, design, and implementation of the Somalia Petroleum Authority among others in two phases by 1) Defining its organizational structure and associated job descriptions and 2) Development of business processes and operational procedure. COMPONENT B: Project Management The objective of Component B is to support the Federal Government of Somalia and its Federal Member States in managing and coordinating the Project and building its procurement, financial management, safeguards management, and monitoring and evaluation capacity through the provision of technical advisory services, training, acquisition of goods, and operating costs. II. OUTCOME Assessment of Achievement of Each Objective/Outcome Strengthening the capacity of the Government of Somalia to manage the petroleum sector has successfully been achieved by, a) creating a National Communications Strategy and Implementation Plan for the upstream sector by the Ministry of Petroleum and Mineral Resources and enabling the roll out of the Implementation Plan, b) supporting the Somalia Petroleum Authority to develop the basic tools (institutional - & organizational structure, HR framework) to start executing its mandate (Phase 1), c) setting up a project management unit within the Ministry of Petroleum and Mineral Resources responsible for project implementation. Page 6 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Sub-component A.1 - Petroleum Communication (0.19 million USD): In August 2019 the Federal Ministry of Petroleum and Mineral Resources commenced with development of a National Communication Strategy and Implementation Plan. The strategy serves the Federal Government of Somalia and the Federal Member States to communicate proactively and consistently to relevant stakeholders on the development of the upstream petroleum sector in Somalia. The key messages were formulated around two themes, i) the management and distribution of wealth, and ii) the opportunities and challenges that development of the upstream petroleum sector will generate for all Somali people. The National Strategy and Implementation Plan was delivered in December 2019. Roll out of this Implementation Plan falls outside this TA. Sub-component A.2 - Institutional Reforms (0.19 million USD): In July 2020 the Somalia Petroleum Authority (SPA) was established following the Presidential ratification of the Petroleum Law on 8 February 2020. At the end of July 2020, the first Chairman and CEO was appointed representing Federal Government of Somalia. In October 2020 the appointment of six independent directors to the SPA board was announced (1 FGS and 5 Federal Member States). The Puntland State has not yet made an appointment of its representative. Last August the SPA commenced execution of its authority by conducting Somalia’s 1st offshore licensing round for 7 offshore blocks with an initial closure date of mid-March 2021, later extended towards June 30th, 2021. Phase 1 of the SPA assignment for the institutional development of the petroleum regulatory authority was completed on December 23, 2020, after starting the contract in May 2020. Due to limited TA funding, Phase 2 - Implementation Plan, Models, Processes, Procedures, Communication Protocol is deferred. A delay in procurement back in 2019 prevented the outcome of the assignment to be available prior SPA establishment in July 2020. COMPONENT B: Project Management (0.11 million USD): In December 2019 a project management unit was established consisting of Project Coordinator, Procurement Specialist and Finance Management Specialist. An experienced Bank project procurement person, part of the World Bank’s SCORE/SCALED-UP project team, acted as Procurement Specialist. The Finance Specialist was nominated by EAFS. The Financial Specialist was replaced in June 2019 upon request from the Ministry. In January 2019, an external Project coordinator was hired for initially 1 year, aligned with the project duration. This contract was extended upon granting the first project extension. The Project Coordinator was not financed by SOPTAP during the second project extension as this additional sum was not included in the initial budget allocation. Page 7 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Overall Outcome Rating Moderately Satisfactory. This rating is a result of M&E Quality (Modest), Bank Performance (Satisfactory), the content of Section III Outcome and the achievement that all activities were fully implemented by the project closing date of December 31, 2020, within budget and without outstanding FM reports. The Bank Performance rating is clarified in Section IV. Throughout implementation of this first recipient executed project, the Client received extensive coaching from the entire Task Team around setting up processes, procedures, and systems enabling monitoring and evaluation of project performance. As such a foundation of M&E capacity has been built within MoMPR. Therefore, M&E Quality is rated Modest. Other Outcomes and Impacts During implementation of this TA program, multiple engagements and briefings have been held with International Donors (like NORAD, African Development Bank, UN, IMF, Federal Governance Committee, Multi Partner Fund Donor Consultation Group) to align capacity building initiatives and policy dialogues. Mid 2019 a legal expert was hired under the umbrella of the previous TA Program (PSID). The legal expert compared the 2008 Somalia Petroleum Bill with the 2017 newly drafted version and the Act which was proposed to Parliament earlier in 2019. Each of these three documents carried an accompanying Model Petroleum Sharing Agreement, laying out the commercial and fiscal structure for potential private sector investors. The assessment focused on, 1) incorporation of the Baidoa Agreement, 2) terms and conditions of different Model Petroleum Sharing Agreements, and 3) potential risks of the Act. The outcome of the review provided input to policy dialogue held by the Bank’s FGC representative. The final version of the Petroleum Bill enacted in February 2020, incorporated the Baidoa Agreement. The commercial terms and conditions (i.e. Model Petroleum Sharing Agreement) adopted for the ongoing licensing round has not been published yet. The scope of the IMF program targeting the enhancement of the Federal fiscal regime was benchmarked with the implications of potential revenue streams from the petroleum sector. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME SOPTAP is the first recipient executed project of the Ministry of Petroleum and Mineral Resources in Somalia. All targeted outcomes have been achieved during project implementation over the course of 2.5 years. The initial committed duration of 1.5 years was extended twice. This was caused by multiple factors. Firstly, the Ministry has insufficient quality and quantity of staff to manage the challenges faced by the administration and the sector in particular. Secondly, the lack of experience with World Bank procurement processes caused delays in awarding contracts for two of the three project activities (National Communication Strategy development, SPA start up). The delays occurred despite a strong commitment from the Director General of the Ministry, the accountable government official for SOPTAP, as well as the support of an experienced Page 8 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) PMU Procurement Specialist. The National Communication Strategy and SPA procurements took nine months and fourteen months, respectively. Thirdly, internal administrative and HR matters at the Ministry including recruiting a successor after the resignation of the first Director General, further delayed implementation. Fourthly, in Q3 2020 the COVID-19 pandemic and the political uncertainty created by the change of the Prime Minister and Cabinet of the Federal Government of Somalia caused slippages in the implementation of the SPA activities. Upon re-nomination of the Minister of Petroleum and Mineral Resources, this activity got back on track and finished at December 2020. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME Over the course of this first recipient executed project, comprehensive implementation support was provided to the PMU by the Bank Task Team. Three implementation support Missions were conducted in mid-June 2018, September 2018, June 2019 respectively. The first Mission was held within one week after formally receiving Bank approval for launching the SOPTAP Project. During this Mission, the Minister of Finance signed the Letter of the Grant Agreement. The status of project preparations was also discussed with the accountable Ministry of Petroleum and Mineral Resources to swiftly appoint an interim Project Coordinator, and to advance the establishment of the 3 staff PMU team, and fiduciary processes around Procurement and Financial Management. In September 2018 the Mission observed project implementation progress with the Client focusing on the first procurement activity, i.e. hiring of permanent Project Coordinator, project management planning and inclusion of project disbursement outlook in Government’s annual budget. In June 2019 the Mission noted the outstanding Client evaluations of the advertised TOR’s for the 2 consultancy activities resulting in lagging disbursements. This justified the first 6-months project extension awarded to the Client by the Bank from an initial grant expiry date of December 31, 2019, to June 30, 2020. In Q1 2020 it was concluded, that due the continuingly steep Client procurement learning curve, and the uncertainties of the COVID-19 pandemic, the one remaining consultancy procurement would unlikely be implemented in a quality manner before June 30, 2020. Therefore, the Bank approved the Client’s second project extension request up to December 31, 2020. Throughout project execution, the PMU Project Coordinator received extensive guidance around contract management, project management monitoring, planning & reporting, annual budget & plan standards, and payment processes from the entire Task Team. The PMU Procurement Specialist and Financial Specialist were supported to comply with Bank policies and procedures by Bank Procurement and Financial Management Departments. Both project extensions were included in the FY20 and FY21 governmental budget. Despite this, the internal Ministerial processes involving MoMPR and Ministry of Finance caused severe delays (up to twelve months) in invoice payments of purchased goods and services. Upon completion of internal approval processes on the client side and newly added Bank endorsement of intermediate contract milestones, direct payment of all pending invoices was finalized within one month after project closure. There are no outstanding FM reports. Based on the reflections in Sections II, III, IV and V, the rating for Bank Performance is Satisfactory. Page 9 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) V. LESSONS LEARNED AND RECOMMENDATIONS • The overall implementation risk of this first small recipient executed project was set as high. The program schedule was initially designed to take 1.5 years. In a fragile federal environment, which was further exposed by the unforeseen resignation of the first Director General and by significant procurement delays, the project management capacity was insufficient to catch up with the initial project implementation schedule. A project duration of 2 years would have been more realistic as part of the Bank’s initial project design. • The experience of the PMU Procurement Specialist and Financial Specialist with the Bank processes and procedures in a previous Bank project has been overestimated by the Bank’s Procurement and Financial Management Team. This observation was made despite the replacement of the initial PMU Financial Specialist one year after project effectiveness upon Client request. The PMU Financial Specialist was replaced by EAFS staff with previous experience with Bank executed projects. All PMU members are recommended to receive the Bank (refresher) onboarding course, not only the Project Coordinator. The planned SOPTAP Bank onboarding training as part of the June 2019 Mission was cancelled last minute as several Client participants (incl. PMU staff) faced suspension of Kenya Government issuing visas. To facilitate the empowerment of the early January 2019 hired permanent Project Coordinator, instead some face to face Bank support was provided to her around fiduciary processes and deliverables by several Bank Departments (i.e. Procurement, Finance, Disbursement, Project Management and Reporting) during the Mission. • The Project Coordinator had no previous experience in managing a Bank-supported project in a complex environment. A more experienced Project Coordinator might have been better prepared handling contextual factors and addressing project challenges. The hiring process by the Ministry of Petroleum and Mineral Resources should have been more stringently adopting these selection criteria which were formulated in the published REOI. • Material delays in payments due to cumbersome inter-ministerial processes might have been prevented. At the start of the project, the Bank Financial Management department educates all stakeholders, i.e. PMU Financial Management Specialist and Client representatives of (i) EAFS, (ii) Financial department of Ministry of Petroleum and Mineral Resources, and (iii) Payment processing department of Ministry of Finance about the procedural payment flow chart in a joint session. This adopted chart would have been the key reference for efficient payments of invoices during the entire project. This session had not been initiated by the Bank Financial Management department. • The PMU was staffed with a Project Coordinator and Financial Specialist. The procurement support for the project was being provided by a Procurement Specialist from the on-going SCORE/SCALED-UP Projects. Therefore, the Procurement Specialist was not fully dedicated to the project. Mitigation measure would include having a dedicated qualified Procurement Specialist recruited specifically for a project whenever the budget allows for a small recipient executed project. • Despite this completed TA program, the status of the Client’s institutional capacity is not yet ideal. SPA Phase 2 i.e. Development of Implementation Plan, Business Models, Processes, Procedures, Communication Protocol is deferred. Whilst the award of the offshore licensing round is expected in Page 10 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Q3 2021, the upstream regulatory framework and establishment of Somali Petroleum Company, have not been finalized. The implementation plan for the upstream national communication strategy thriving stakeholder awareness about potential income streams and revenue sharing, as well as environmental, health and safety risks, has not been rolled out by the Ministry of Petroleum and Mineral Resources. Ahead of the planned offshore exploration drilling, the SESA ToR has not been procured by the Client. • Recognizing that the SOPTAP project can only prepare a foundation for institutional capacity, which requires continued support from Development Partners to establish a level of capacity that allows the Ministry of Petroleum and Mineral Resources to fully execute its mandate, the project “Building A Foundation for Petroleum Governance (BAFPEG)� was proposed for funding by Somalia Multi Partner . Fund in 2018. No funding for the proposed scope of work has been approved thus far. . Page 11 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: To strengthen the capacity of the Federal Government of Somalia to manage its petroleum sector Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Somalia Petroleum Authority Yes/No N Y Y Y has the basic tools to start executing its mandate 01-Jun-2018 30-Dec-2019 31-Mar-2020 23-Dec-2020 Comments (achievements against targets): In July 2020 the Somalia Petroleum Authority (SPA) was established following the Presidential ratification of the Petroleum Law on 8 February 2020. At the end of July 2020 the first Chairman and CEO was appointed representing Federal Government of Somalia (FGS). In October 2020 as per the provision in the Law the appointment of six independent directors to the SPA board was announced (1 FGS and 5 Federal Member States). The Puntland State has not yet made an appointment of its representative. Last August the SPA commenced execution of its authority by conducting Somalia’s 1st offshore licensing round for 7 offshore blocks with closure date mid March 2021. The SOPTAP Consultancy assignment for the institutional development of the petroleum regulatory authority Phase 1 Institutional design was completed on December 23, 2020, after starting early May 2020. Due to limited funding, Phase 2 Implementation Plan, Models, Processes, Procedures, Communication Protocol is deferred to another time. There was a delay in procurement of the April 2019 published REOI due to a steep Client procurement learning curve. In Q3 2020, the execution of the assignment suffered from the political uncertainty created by the change of the Prime Minister and Cabinet. Upon reconfirming nomination of the Minister of Petroleum and Mineral Resources the assignment got back on track. Page 12 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion National Communication Yes/No N Y N Y Strategy and Implementation plan 01-Jun-2018 30-Dec-2019 30-Dec-2019 31-Dec-2019 Comments (achievements against targets): In August 2019 the Federal Ministry of Petroleum and Mineral Resources commenced with development of a national communication strategy and implementation plan for the Federal Government of Somalia and the Federal Member States to communicate proactively and consistently to relevant stakeholders on the development of the upstream petroleum sector in Somalia; the management and distribution of wealth; the opportunities and challenges that development of the upstream petroleum sector will generate for all Somali people. Outside SOPTAP it is upon the Client to execute the Implementation Plan. A.2 Intermediate Results Indicators Component: Client Project Management Capacity Increased Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Somalia Petroleum Authority Yes/No N Y Y Y organizational structure and associated job descriptions in 01-Jun-2018 30-Dec-2019 31-Mar-2020 23-Dec-2020 place Comments (achievements against targets): After procurement of about 1 year, the assignment Institutional Development of the Petroleum Regulatory Authority Page 13 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) in the Federal Government of Somalia - Phase 1 Institutional Design started early May 2020 with a completion date December 23rd, 2020. The Organizational Structure, reporting relationships and job descriptions are captured in the final report. In mean time the Feb 2020 enacted Petroleum Law facilitated nomination of Somalia Petroleum Authority CEO, and Board Members with representation of Federal Government and Member States in July, October 2020 respectively. The delay in procurement back in 2019 prevented the outcome of the assignment to be available prior SPA establishment in July 2020. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Business processes and Yes/No N Y Y N operational procedures for Somalia Petroleum Authority 01-Jun-2018 30-Dec-2019 31-Mar-2020 31-Mar-2020 Comments (achievements against targets): The February 2020 enacted Petroleum Law facilitated nomination of Somalia Petroleum Authority (SPA) CEO, and Board Members with representation of Federal Government and Member States in July, October respectively. The SPA commenced execution of its authority by conducting Somalia’s 1st offshore licensing round since early nineties, announced on August 4th 2020 with closure date March 12th 2021. Due to limited TA funding, Phase 2 - Implementation Plan, Models, Processes, Procedures, Communication Protocol of supporting building regulatory capacity of SPA is deferred. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion TOR for SESA drafted Yes/No N N N Y 01-Jun-2018 01-May-2019 30-Dec-2019 10-May-2019 Comments (achievements against targets): Page 14 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) Draft SESA TOR has been submitted by the Client in support of the Bank's Environmental Global Practice. Page 15 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) B. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective/Outcome 1 Outcome Indicators Somalia Petroleum Authority has the basic tools to start executing its mandate TOR for SESA drafted in April 2019 Intermediate Results Indicators 1. Final Report capturing organizational structure and job descriptions submitted in December 2020 2. SPA CEO and Board Members nominated in H2 2020 Key Outputs by Component 3. Since the ninety nineties first offshore exploration petroleum licensing (linked to the achievement of the Objective/Outcome 1) round launched in August 2020 with closure in March 2021 (currently extended towards end June 2021) Objective/Outcome 2 National Communication Strategy and Implementation plan Outcome Indicators Intermediate Results Indicators Final Report with National Communication Strategy and Implementation plan Key Outputs by Component was issued in December 2019 (linked to the achievement of the Objective/Outcome 2) Page 16 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) . ANNEX 2. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Component A: Upstream Sector - Reforms and 0 .40 0 Capacity Building Component B: Project 0 .10 0 Management Total 0.00 0.50 0.00 Page 17 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Page 18 of 19 The World Bank Somali Petroleum Technical Assistance Project (SOPTAP) (P164175) ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) IMF Briefing note - February 2020 IMF-Somalia Petroleum sector_Brief - final - 100220.docx Petroleum Bill assessment - August 2019 PetroleumBill Review-August 2020.doc Page 19 of 19