Al-Akhbar Magazine: Somalia: The Age of Oil

[Timur]

http://english.al-akhbar.com/content/somalia-age-oil

 

Oil drilling has reached the Puntland region of Somalia and brought with it a mixture of hope and fear over the gains ordinary Somalis will reap from a foreign-driven venture.

 

Mogadishu – Horn Petroleum Corporation, a Canadian oil and gas company, announced the commencement of its oil drilling operations in areas under the control of the regional government of Puntland in northeast Somalia.

 

The company is currently preparing to drill the Shabeel-1 well to a depth of 3,800m (about two miles) following a test drill to a depth of 50m. Horn Petroluem Corporation will drill, for a period not exceeding 90 days, in the Dharoor Valley in the east of the region. Assuming that the drilling attempt is successful in Dharoor, the rig will then be moved to drill two other wells in the Nugaal region.

 

There has been no oil drilling in Somalia for over 20 years, a period in which the country faced a severe crisis that led to the toppling of the central government in 1991. Foreign companies have not extracted oil and minerals since the fall of the central government due to the inability of Somali factions and various drilling companies to agree on drilling terms, in addition to the weak security situation in the country.

 

Shabeel-1 and other wells close-by are located in the northern Dharoor region. The well will operate in the Jurassic aged rift system, which is part of the same system from which oil was extracted in the Masila and Shabwa Basins in Yemen. Those basins contain an estimated 6 billion barrels of oil.

 

Shabeel-1 is estimated to have over 300 million barrels of recoverable oil. It should be noted however that the type of source rocks found suggest that the well’s prospects are below what was originally expected.

 

Studies, however, indicate that the sandstone and the carbonate reservoirs of the lower Jurassic and Cretaceous systems found in the Somali territories are similar to

Yemen.

 

Horn Petroleum president and CEO, David Grellman said: “... drilling in the Dharoor Valley will be a major milestone in the evaluation of the oil potential of Northern Somalia. We have had very strong support from the Puntland regional government and the local communities, who are all keen to see development resume in the region after prolonged periods of internal strife.”

 

“These wells are the first to be drilled into the deep areas of the rift basins and will be key to unlocking the hydrocarbon potential of this unexplored area,” he added.

 

Social activist Zahra IshakIn, from Garowe, the administrative capital of the Puntland region, said oil production in the northeast area of the country will likely signal prosperity and good fortune for all the Somali people.

 

She points out that seven tribes united after oil production commenced in the region and that most outstanding issues between them were solved. “That is why we want to move forward in this direction so we would all unite once again.”

 

The Puntland regional government signed a deal with Horn Petroleum and its partner companies, granting them 51 percent of the company in return for allowing the drilling. Some MPs in the transitional Somali parliament, however, opposed the deal because it gives the companies a bigger share. Other MPs called for a halt to all drilling operations, until the country is stable again.

 

A political and constitutional dispute emerged between the Somali transitional government and the Puntland regional government in 2006 when the latter signed secret deals with companies that the central government had not approved.

 

The Somali petroleum law provides that each regional government recognized by the central government in Mogadishu has the right to extract oil and minerals on the condition that the Somali parliament approves the signed deals and the oil profits are divided between the central and regional governments.

 

The President of Puntland, Abdirahman Mahmoud Farole, pointed out that the Somali Prime Minister, Abdiweli Mohamed Ali, had officially approved the commencement of the drilling operations in Puntland, and had signed a memorandum approving the drilling two weeks ago in the city of Bosasso, in the Eastern Province.

 

Farole also said there are indicators that Somalia will witness an easing in crises like hunger, infectious diseases and civil war in the near future. At the drilling ceremony, he said: “This fuel well is not only for Puntland. It will benefit all Somalis, and will not be a reason for an economic conflict between Somali provinces and tribes.”

 

The Puntland government’s petroleum, energy, minerals, and water ministry expects that additional oil fields will be discovered in the region in the coming few months. The ministry revealed that efforts are underway to expand the oil exploration project in addition to building refineries in order to increase oil production capacity.

 

The drilling operations that began following the signing of the deal with Horn Petroleum were preceded by geological and geophysical surveys in different areas of the north-eastern regions of the country.

 

The minster of petroleum, water, minerals, and energy in the Somali transitional government confirmed that the central government will receive half of the oil output from every autonomous region, according to the petroleum law approved by the transitional parliament in 2007.

 

In the process of preparing for oil exploration in the north, a high-ranking Somali officer who refused to be identified confirmed that military and intelligence forces that belong to the Puntland regional authorities tightened control over the Dharoor Valley and Nugaal in order to repel any possible “terrorist” or tribal attacks.

 

The former Somali government led by Major General Siad Barre was reluctant to sign exploration deals with US companies Chevron and Sun Oil and with the French company Total in 1985 after discovering oil in Kota, Brawa, Homboy, Afgooye, Mogahishu and other areas in the center and north of the country, especially near the border with Djibouti and Kenya.

 

The government at the time demanded decreasing the companies’ shares from 51 percent to 48 percent, but company officials refused. After that, Somalia fell into chaos in the wake of the collapse of the military government on 26 December 1991.

 

Economic expert Mohamed Ibrahim expects Somalia to become a place of interest for powerful countries based on its resumption of oil production. This may encourage investment in the oil, agricultural, and industrial sectors in addition to the of export of sheep, bananas, pure honey, fragrances, and fish to Arab and European countries.

[MoonLight1]

Arabs are not and will not be happy Somalia drilling oil. and the evidence is there for the last 21 years, they just watched us destroy each other with no help but only famine handouts through western organisations, and look how they helped Yemen, Libya, Iraq, and now Syria.

[kingofkings]

MoonLight1;783717 wrote:

Arabs are not and will not be happy Somalia drilling oil. and the evidence is there for the last 21 years, they just watched us destroy each other with no help but only famine handouts through western organisations, and look how they helped Yemen, Libya, Iraq, and now Syria.

Why would arabs help us. we are not arabs, but somali. It's not their fault where we are today and for the past 20 yrs. Part of being people and country is taking responsibility for the bad things that happens. So, it us and not them.

[Timur]

MoonLight1;783717 wrote:

Arabs are not and will not be happy Somalia drilling oil. and the evidence is there for the last 21 years, they just watched us destroy each other with no help but only famine handouts through western organisations, and look how they helped Yemen, Libya, Iraq, and now Syria.

Ignorant and paranoid statement.

 

Saudi Arabia was the #1 proponent in oil exploration in Somalia in the 1980s, and today UAE is the #1 supporter of the current exploration effort. The Arabs view Somalia in a good light, and since they share the Arab League with Somalia they view Somalia as a potential addition to their total wealth.

 

Somalis and their anti-Arab myths are quite sad.

 

As for Iraq and Yemen? Who helped them? Yemen is an absolute hell, and Iraq's inter-Arab violence has not dissipated one bit and it has taken more lives than the war in Somalia.