Africa Oil Defies Al-Qaeda and Continues The Drilling Of Dharor Well

[Dr_Osman]

Somalia: Vancouver-based Africa Oil defies Al-Qaeda in billion-barrel Somali well drill

 

Updated:- 12 hours ago| 0 Commnets

 

In a Somali desert that’s home to al-Qaeda-linked militia, Africa Oil Corp. drills inside a fortress of excavated earth dotted with lookout towers and armed guards to satisfy a world thirstier than ever for crude.

 

The Canadian company is poised to complete the nation’s first oil well in at least 20 years. The prize is the more than 1 billion barrels of oil resources Africa Oil estimates is in the Dharoor Block in Puntland, a semi-autonomous northern region where the central government is battling Islamic extremists.

 

“Security costs are significant,” Chief Executive Officer Keith Hill said in an interview. Still, there aren’t “many places on Earth we can go onshore with contractors and try to find a possibility for a billion-barrel oil field.”

 

Oil prices that almost doubled in the past three years have spurred exploration in locations once considered too risky, with Genel Energy Plc, set up by U.K. financier Nathaniel Rothschild and former BP Plc CEO Tony Hayward, acquiring stakes in the Kurdistan region of Iraq. Royal Dutch Shell Plc and BP are returning to Libya after leader Muammar Qaddafi was deposed.

 

Competitors including Exxon Mobil Corp., Shell and Eni SpA are venturing into the deepest waters ever and risking the Arctic’s frozen dangers. Executives from the three companies are among those gathering in Houston this week at a conference to discuss challenges in meeting record global oil demand.

 

In Somalia, Vancouver-based Africa Oil and partners Red Emperor Resources NL and Range Resources Ltd. hired South African security consultant Pathfinder Corp. to help protect their site. Local patrols are in place, and the regional government is providing added military strength, Hill said. Defenses include heaping dirt in a perimeter, or berm, around the site, to keep intruders out.

 

Islamic Rebels

Africa Oil, whose shares have gained 32 percent in Canada this year, plans to invest at least $50 US million drilling two wells in the block, with the first to be ready this month.

 

Local threats may be rising. Islamist rebels in Puntland joined al-Qaeda-linked Al-Shabaab extremists responsible for suicide bombings in Mogadishu and plan attacks on the Africa Oil operation, according to a Feb. 27 article by Somalia Report, a news service set up by U.S. journalist Robert Young Pelton, author of war zone handbook The World’s Most Dangerous Places.

 

Al-Shabaab, which claimed responsibility for a suicide attack on a Mogadishu hotel that killed at least 15 last month, rejects the award of oil licenses to Western companies, Reuters said on Feb. 25, citing the group’s Twitter account.

 

“Western companies must be fully aware that all exploration rights and drilling contracts in N. Eastern Somalia are now permanently nullified,” a Twitter post claiming to be from Harakat Al-Shabaab Al Mujahideen’s press office said that day. Africa Oil’s contracts are “non-binding,” it said.

 

Bloomberg wasn’t immediately able to confirm that the account is run by the Al-Shabaab group.

 

Insurance Premiums, Contractors

 

“We take all threats seriously and have stepped up security levels,” Hill said in an e-mailed reply to queries. “Our security advisers assure us we are well-protected.” Higher insurance payments and premiums to contractors from Egypt and the Middle East add to the costs, Hill said.

 

Western governments are leading efforts to bring stability to Somalia, which has been wracked by civil war since the ouster of dictator Mohamed Siad Barre in 1991, while pirates operating in the country plague shipping in the Indian Ocean.

 

U.S. Secretary of State Hillary Clinton, joining a conference hosted by U.K. Prime Minister David Cameron in London last month, said her government would encourage the imposition of further sanctions, including travel bans and asset freezes, on those “who seek to undermine Somalia’s peace and security.”

 

‘Cynical Oil Grab’

British officials are in talks with the Puntland regional government over exploiting oil reserves in the northeast, the Observer newspaper reported Feb. 25, citing Abdulkadir Abdi Hashi, the local minister for international cooperation.

 

The U.K. push for aid to Somalia looks like a “cynical attempt to grab its oil,” the World Development Movement, an anti-poverty campaign group, said in an e-mailed statement last week. U.K. International Development Secretary Andrew Mitchell, who visited Puntland before the London conference, has denied there is any commercial imperative in the government’s efforts.

 

A well drilled in the area in 1958, before Somalia gained full independence, showed signs of oil in several zones, Red Emperor said in a November presentation. The former U.K. colony of Somaliland and former Italian trust territory of Somalia joined to form the unified independent state of Somalia in 1960.

 

Tullow, Total

 

Oil exploration costs have been rising around the world as companies search in harder-to-reach areas. Tullow Oil Plc, Shell and Total SA spent more than $200 US million drilling off the coast of French Guiana, one of the industry’s most expensive wells, to open a new frontier in Latin America. Tullow announced the country’s first find, of light and heavy oil, in September.

 

The Dharoor field in Somalia may hold 1.2 billion barrels of oil resources, according to the project operator’s website.

 

Africa Oil and its partners are betting on geology similar to Yemen across the Gulf of Aden, which split from Africa about 17 million years ago, according to Red Emperor. Yemen holds 2.7 billion barrels of proved oil reserves and ranks ninth in the Middle East for output of both oil and natural gas, BP says.

 

The Shabeel-1 well, the first being drilled, reached 1,230 meters (4,035 feet), Range Resources said Feb. 23. The company and Red Emperor announced share sales to raise funds last month.

 

© Copyright © The Vancouver Sun

[Dr_Osman]

Drilling for black gold [Oil] is under progress in Puntland Somalia

 

March 6, 2012 // News in English, Warar Somaali

 

On 16 January 2012 African Oil Corporation commenced Shabeel-1 and Shabeel North-1 wells drilling project on the Dharoor Block in Puntland, Somalia.

 

The drilling and evaluation for both wells are expected to take approximately 90 days. They are first oil exploration wells to be drilled in Somalia for over 20 years. This has been welcoming news to every Somali who always believe that their country has a vast undiscovered oil reserves.

 

The former president of Puntland State of Somalia Gen. Mohamud Muse Hersi (General Cade) took every step of his capacity as president of a federal state to engage contracts with multinational oil companies and invited them to carry out projects for unearthing potential oil reserves in Puntland.

 

It was a challenging Endeavour under the international legal perspective as the country-Somalia was politically in turmoil with no effective central government. After impeding obstacles, sabotage and legal hurdles exercised by the TFG senior officials, the General challenged them tenuously for the fact that Puntland as federal state within the greater Somalia Republic has every right to explore its oil reserves. However, it was a dream came true to many Somalis myself included when I watched the well organized ceremony attended by the current president of Puntland, Mr Abdirahman Faroole along with his predecessor Gen. Ade Muse, officials from African Oil Corporation, Puntland Ministers, distinguished guests from Puntland Business Community, elders and members of the general public to witness in their own eyes the announcement made by the president that the spudding of the Shabeel-1 well on the Dharoor Block in Puntland has commenced.

 

The speech made by the president was encouraging as he confirmed that the resources in puntland were for all Somalis ruling out any sole regional ownership in respect of the proceeds from the oil in Puntland.

 

The company officials produced an initial estimate that both wells in Dharoor Block will have potential oil volumes of over 300 million barrels of recoverable oil each. The wealth this volume of oil will bring at the current market are estimated approximately 2 trillion US dollars. This is a huge income which could turn around the whole country from impoverished nation fed by the hand outs from the international community to an oil rich country at the horn of Africa.

 

The recent research by BP shows that world oil demand would rise by 18 per cent to 103m barrels per day by 2030. China and India will become the world’s largest and third largest economies and energy consumers by 2030, as global energy supply demand grows by 1.6 per cent a year.

 

However, in order to avoid any mishandling on the public resources Puntland state needs to establish a strong foundation in democracy. All the mechanisms of democracy need to be deployed such as effective parliament, judiciary system and independent court. These are the pillars of democratic environment in which Puntland has to embrace which will stop leaders to cling to power through corruption and deceit. Mature and responsible press acts as vocal about the issues beneficial for the public and therefore should be encouraged to operate in Puntland independently.

 

Above all the constitution of Puntland should be based on the Islamic Sharia (the Quran) and the Somali Customary Law (xeer dhaqameed) which coexist in harmony, and is approved by a constitutional assembly selected from grass root level through consensus. Clan elders (Isimo) are indispensible to the security and strength of Puntland and it is vital that their role should not be underestimated. The Puntland Parliament would have to reformed and replaced by educated members from the different sections of the community elected on merit by their respective constituencies. Community cohesion is vital for the stability and progress of the government and needs to be maintained with diligence. Equality before the law is the best way to scale down acrimonious clan divisions.

 

The process of introducing multiparty system in Puntland has to be gradual and inclusive so potentially votes of every eligible citizen will count, and in effect there will be a room where the government be seen as accountable to the people it represents.

 

It is also conceivable that the oils revenues will be ill managed without a stringent financial regulations combined with professionally qualified personnel who understands the ethics of social and professional responsibility. This would certainly deter corrupt officials who put their own interest above the needy and poor Puntlanders to steal public money from oil revenues and enrich themselves.

 

Once the process of oil production commenced multinational companies will be heading to Puntland for investments, businesses in various sectors will flourish. It is therefore essential banks and other financial institutions be established in Puntland. It is also inevitable for Puntland to have taxation structure whereby multinational companies are levied tax on their earnings from Puntland Oil. Federal Pay as you earn tax (PAYE) should be deducted from employees’ wages/salaries working for the oil companies whether they are expatriates or local staff.

 

Therefore, Puntland Government Inland Revenue should be formed as soon as possible which will handle with managing tax revenues, collections and fixing tax rates. Revenue staff has to be equipped with adequate training in tax law, revenue collection systems, tax calculations, administration, accounting knowledge and international jurisdictions on taxation.

 

All sources of Puntland income have to be transparent and government officials will have to be held accountable for any embezzlement of the public money. This is to avoid the public money received in the form of taxation or the proceeds from Puntland oil being pocketed for a personal gain.

 

I will remind to those corrupt Puntland officials that, in the words of Mahatma Gandhi, there’s enough for everybody’s need but not enough for every one’s greed.

 

Mr A A Hashi BA (Hons) ATT ACCA

[kingofkings]

I will remind to those corrupt Puntland officials that, in the words of Mahatma Gandhi, there’s enough for everybody’s need but not enough for every one’s greed.

 

[Dr_Osman]

Kingy, were going to be oil-rich, politics is going well and the nation from kismayo to zaylac is recognised under garowe principles. What you think we should with the money, there is no question more weapons, more sophiscated airforces with jet fighters, more modern tanks, aerial missile systems

[kingofkings]

Dr_Osman;799480 wrote:

King, were going to be oil-rich, politics is going well and the nation from kismayo to zaylac is recognised under garowe principles. What you think we should with the money, there is no question more weapons, more sophiscated airforces with jet fighters, more modern tanks, aerial missile systems

well among other things, i think the next PL government should give you the PL medal of the decade or century. secondly, i want to see PL to become the Dubai state of Somalia. i know that's a bit vague, but all one has to do is see the before and after pic or video of Dubai to get a sense of what i mean. hope that helps Osman.