(GEESKA) Ethiopia, Somalia, Kenya Will be the Next Great Oil Province

[Jabhad]

Hey Nomads, Is there a black gold in our backyard? Maybe, according to this article.

 

Somalia: Energy-hungry China is talking to develop energy sector*

 

 

Nairobi (HAN) January 1, 2006, - The Western diplomats based in Kenya

and Addis Ababa have said that now Somalia may become more politically

stable, government officials from energy-hungry China have been talking

to the current president of Somalia, Abdulahi Yusuf about the

possibility of helping develop the country's energy sector. Abdulahi

Yusuf denied this. "It's not true," he said. "Nobody talked to us and

asked us about oil in Somalia."

 

 

Asked to comment on China's relationship with Somalia, the foreign

ministry said in July: "The Chinese side is willing to take an active

part in Somalia's economic reconstruction and explore the possibilities

of all kinds of cooperation with the Somali side."

 

 

With soaring demand from China's burgeoning economy, a key factor in

global oil markets, and Indian consumer markets, oil producers operate

close to maximum capacity. The Paris-based International Energy Agency

predicted in December that oil demand will increase 7.8 percent in 2006,

mostly due to China's growth in demand.

 

 

Despite the successful acquisitions around the world, China lost -- or

rather withdrew from -- a bidding war over Unocal, which Chevron secured

for $17-plus billion.

 

 

India folded on a multibillion dollar project in Nigeria after India's

Cabinet Committee on Economic Affairs turned down a $2 billion proposal

from state-run Oil and Natural Gas Corp. to acquire a 45 percent stake

in a Nigerian oil and gas field, giving Chinese firms an upper hand.

Competition between India and China could grow fiercer in 2006 as both

countries aim to meet soaring demand.

 

 

China has also not shied away from investing in countries the United

States has poor relations with such as Sudan and Iran. Sen. Joseph

Lieberman, D-Conn., warned this year about potential U.S. military

conflict with China, if the two sides do not work together.

 

 

Somalia's oil and gas potential attracted attention from Western major

oil producers before the country collapsed in chaos in 1991, and

diplomats say Asian firms have shown recent interest amid efforts to

stabilise the Horn of Africa country. Somalia lies across the Gulf of

Aden from the Arabian peninsula and next to Ethiopia's Somali National

Regional State, which has proven reserves of natural gas & Oil.

 

 

The President of Somalia, Abdulahi Yusuf, trying to build an effective

central government following his election by lawmakers at peace talks

last year, told: "Any company that is interested in the natural

resources of Somalia can come (to talk) to the government, no matter

from which country."

"After all, we will look after our interest. Let them compete, and the

best company will win," he said during a visit to Nairobi en route to

Saudi Arabia to discuss possible aid for Somalia.

 

 

Somalia has no proven oil reserves and only 200 bn cf of proven natural

gas reserves, according to the US Energy Information Administration.

However, companies including Total, Amoco, Chevron and Conoco and

Phillips, which have since merged into ConocoPhillips, held exploration

concessions in northern Somalia in the 1980s.

The firms declared force majeure following the collapse of the central

government in 1991. Force majeure is a clause in a contract exempting

the parties from their obligations under the agreement as a result of

conditions beyond their control.

 

 

Former government officials said they were negotiating energy deals with

about 12 foreign companies in the late 1980s, but the contacts ended

when the overthrow of former dictator Mohammed Siad Barre in 1991

triggered a civil war. Hundreds of thousands of Somalis have died from

famine, disease and violence since then. Analysts say the war has left a

complex legal legacy. Some of the old exploration concessions were in a

part of northern Somalia that is now within the territory of Somaliland,

which declared independence from the rest of Somalia in 1991.

 

 

Somaliland, which is not recognized internationally, is also seeking to

develop its energy sector but must try to avoid conflict with the

earlier accords signed by the internationally recognized pre-war Somali

government based in Mogadishu. Asked whether he was in a position to

decide what to do with the previous oil exploration agreements, Yusuf

replied that he needed more information before he could address the issue:

"I never read these contracts," he said. "I don't know if they are

contracts previously agreed with the late Somali government or not. I

have to see documents. If these companies have documents, they have to

show us."

 

 

Industry analysts foresee a rise in the volume of energy deals in 2006

-- partially due to a growing struggle to secure increasingly scarce

energy resources around the globe. Experts predict fewer mergers such as

Exxon's $80 billion merger with Mobil will occur in the future, while

smaller but influential deals will be predominant, especially with major

energy players such as China, Japan and India. Smaller acquisitions and

mergers will most likely be the common theme in 2006.

 

 

*

Ethiopia, Somalia, Kenya Will be the Next Great Oil Province*

 

 

Nairobi (HAN) January 1, 2006, - Tom Windle, who explored some of

Africa's west coast sites for Amoco, believes Africa's potential has

barely been recognized. The regional geologist says that East Africa is

the most significant potential oilfield worldwide.

 

 

A top When Conoco's Mogadishu office became the de facto US embassy

before the Marines landed in Somalia; it was not a war on terror, but

supposedly a "humanitarian mission". Protecting oil concessions to

Conoco and other US corporations was a key factor behind this invasion,

after major oil finds in Somalia. The president of the company's

subsidiary in Somalia served as the US government's volunteer

"facilitator" before and during the US invasion and occupation.

 

 

The influential Sunday Times described British geologist Jeremy

Leggett's first book "The Carbon War" as "the best book yet on the

politics of global warming." His latest "Half Gone" endeavors "to prove

the case for two big arguments." Leggett contends that "the oil topping

point, otherwise known as the peak of production, will be reached in the

2006-2010 window and when the market realizes this, severe economic

trauma will ensue. Second, global warming is a real, present, and

fast-growing danger."

 

 

Tom says that although there are prospects for further oilfields in West

Africa, it was in the East and the Horn of Africa where the potential is

the greatest.

 

 

"If you really want to know where I think the future of Africa is, it's

the east coast," he told the Times. "If someone came to me and said,

'Here's a billion dollars, I want you to open up a new frontier basin,'

I would say, 'Right, the East African margin; In my opinion the East

African margin (from Sudan, through Ethiopia and Somalia down to Kenya)

will be the next great oil province." It's a view shared by Stewart

Williams, the consultant from Wood Mackenzie who said that East Africa

is now "emerging" after years of being ignored.

 

 

Big companies are now attempting to "book reserves" in the region under

the most favourable terms they can and they have found willing takers in

East African governments, anxious to see investment as well as hopeful

that any new oil deposits will bring huge economic benefits.

 

 

A number of companies are now involved in exploring the possibility of

oil finds in East Africa including Exxon Mobil, Woodside Petroleum and

Tullow Oil, which earlier this month recorded a 660 per cent increase in

its profits for the first half of 2005.

 

 

The British company has invested in trying to explore four potential oil

fields in Uganda.

 

 

Tullow Oil chief executive Aidan Heavey put his firm's exceptional

performance down both to the increase in oil prices and its strategy of

investing heavily in potential new oilfields in Africa and Asia.

 

 

The company has already seen considerable success with its African

venture after interesting discoveries in Gabon and, despite the fact

that no oil wells have been drilled in Uganda since the 1940s, is

hopeful that its four licences agreed with Kampala - three of which are

new - will bear fruit.

 

 

Mr Heavey said that the outlook for the rest of the year for the company

remained "exciting" with "high impact" exploration wells planned for

both Uganda and Mauritania.

 

 

The company has also decided that as a result of its success it will

stick to the current strategy of deals and exploration rather than

involvement in refineries.

 

 

"You've got to know what you are good at and stick to it," Mr Heavey

told the Guardian newspaper.

 

 

Tullow has doubled in size thanks to its purchase of Energy Africa last

year.

 

 

Africa currently produces around 11 per cent of the world's oil and over

five per cent of natural gas.

 

 

It is home to nearly 10 per cent of proven world oil reserves totalling

some 112 billion barrels.