India Takes a Regional Approach to Somali Oil, interesting article.....

[General Duke]

BY SAURAV JHA | 13 APR 2012

BRIEFING

 

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It is no surprise that piracy has steadily climbed up the ranks of threats to India’s security, given India’s energy trade with the Middle East. But now, with vast untapped oil reserves reported in Somalia and just off its coast, piracy emanating from the Horn of Africa is impinging on India’s future energy sourcing opportunities as well.

 

Further complicating India’s plans for the region is the nexus between Somali pirates and the al-Qaida affiliate al-Shabab, which still has a significant presence in central Somalia and provides sanctuary to pirate fleets operating out of the central Somali city of Harardhere in return for a share of the bounty. If left unchecked, al-Shabab may also become capable of threatening various connectivity projects India is building in the region. As a result, India is likely to coordinate with Somalia’s neighbors and the United States in the effort to contain the group’s virulent jihadism and stabilize the area.

 

In January, the Canadian wildcat firm Africa Oil began drilling in Somalia, marking the country’s first new oil development project in 21 years. The company, which reportedly made strikes in Puntland, stated that that there could be reserves of up to 4 billion barrels, worth close to $500 billion at current prices, in its two drilling blocks alone. This would be consistent with various estimates over the years putting Somalia’s oil reserves both onshore and offshore in the range of 110 billion barrels. Add to this the natural gas reserves estimated at more than 100 trillion cubic feet that have been found off the West African coastline, and a picture of Somalia’s potential hydrocarbon prospects begins to emerge.

 

Hydrocarbon-hungry India is no stranger to tapping oil reserves in war-torn northeast Africa. India is one of the largest investors in South Sudan’s oil sector, and New Delhi recently dispatched a special envoy to mediate in the crisis between Sudan and South Sudan over oil-transit fees. India is also offering to build processing, refining and pipeline facilities for South Sudan that would allow it to transport Southern oil to coastal ports via either a route traversing Ethiopia to Djibouti or another via Kenya, thereby reducing the newly formed nation’s dependence on the existing pipeline infrastructure controlled by Khartoum.

 

The offer to provide connectivity to South Sudan reflects the very close ties that India now enjoys with the more stable countries in the region -- namely, Ethiopia, Kenya and Djibouti. The Second India-Africa Forum Summit, held in Addis Ababa last year, at which New Delhi extended a $5 billion credit line to various African states, convinced regional players of India’s staying power. A significant portion of that credit is being channeled into building connectivity projects in the Horn of Africa, such as a $300 million rail link between Ethiopia and Djibouti. New Delhi expects these countries to facilitate India’s emerging interests in Somalia, given their proximity.

 

Indeed, India seems to view relationship-building with various countries in the Horn of Africa as part of a regional approach. During the Summit on the Horn of Africa Crisis hosted by the U.N. in Nairobi last year, India pledged $8 million to counter drought in Kenya, Somalia and Djibouti. A significant amount of India’s diplomacy with the Somali Transitional Federal Government is also routed via Nairobi, with the Indian high commissioner to Kenya having responsibility for Somalia as well.

 

Given that Ethiopia and Kenya are heightening their military activities against al-Shabab in Somalia, India’s military assistance to both countries -- especially with regard to training -- is steadily rising, with the number of Indian Technical and Economic Cooperation training slots offered to the two countries consistently increasing each year. India is also likely to emerge as a key provider of naval hydrographic services to Kenya, which would have a direct bearing on future offshore prospecting.

 

Now that al-Shabab has been ousted from Mogadishu, India is beginning to ramp up its capacity-building efforts in Somalia itself. India’s exports to Somalia totaled nearly $200 million in 2011. Somalia is also included in India’s pan-African e-network project aimed at making a range of technical information available through IT-enabled low-cost dissemination, and in the future India may help create a national army for Somalia, just as it is doing in Afghanistan.

 

In another possible indicator of an eventual Indian push in Somalia, a growing number of Indian businesses are setting up shop in Djibouti, especially in the hospitality sector. Djibouti is the key terminal for current and future Indian connectivity projects in the region and is a frequent destination of port calls by Indian warships.

 

Beyond sustaining ties with Somalia’s immediate neighbors, India is likely to continue to coordinate with American moves in Somalia. New Delhi will certainly be supportive of U.S. President Barack Obama’s program of drone strikes on al-Shabab, not just for the sake of oil prospects in Somalia, but also to ensure that no wider jihadist threat manifests itself in Indian Ocean island states such as Comoros, Mauritius or the Maldives. Indeed, the recent coup in the Maldives has raised suspicions in some quarters in India about pan-Islamist moves centered in Somalia radiating outward to the east. With pirates beginning to be sighted off the western coast of India, it is no wonder that New Delhi, besides increasing its military capabilities in its Lakshadeep island chain, is going along with America’s “Dirty Harry” approach in the Horn of Africa. True to form, India continues to see geo-economics and geopolitics as two sides of the same coin.

[General Duke]

In January, the Canadian wildcat firm

Africa Oil began drilling in Somalia

, marking the country’s first new oil development project in 21 years. The company, which reportedly made strikes in Puntland, stated that that there could be reserves of up to

4 billion barrels, worth close to $500 billion at current prices, in its two drilling blocks alone.

This would be consistent with various estimates over the years putting

Somalia’s oil reserves both onshore and offshore in the range of 110 billion barrels. Add to this the natural gas reserves estimated at more than 100 trillion cubic feet that have been found off the West African coastline, and a picture of Somalia’s potential hydrocarbon prospects begins to emerge.

 

Its a new world...

[General Duke]

http://www.worldpoliticsreview.com/articles/11840/india-takes-a-regional-approach-to-somali-oil

[uchi]

The future is bright Duke..., we certianly need to work with Somaliland folks to rid of this Shabab virus~ let's hope these talks with sharif will be worthwhile~

[Burn Notice]

General Duke;818674 wrote:

Its a new world...

Good to see PL leading the way GD

[Timur]

It's amazing to see that the world media already has taken notice and now everyone considers Somalia a resource state even before the facts. The future looks good and the world is opening its eyes to Somalia.

[General Duke]

Burn Notice;818757 wrote:

Good to see PL leading the way GD

It's good to see you my friend.

[Mario B]

What if, I sometime ask myself, there is no oil, how are we ever going to ever recover from that!? All I know is "Somalilanders" will be celebrating all the way to the nearest mafrish, as for the rest of us we might need something stronger...

[Burn Notice]

Mario B;818773 wrote:

What if, I sometime ask myself, there is no oil, how are we ever going to ever recover from that!? All I know is "Somalilanders" will be celebrating all the way to the nearest mafrish, as for the rest of us we might need something stronger...

NO need to fret Mario

 

Hill is VERY happy that the drill to date shares the same geology as the prolific Yemen oil fields..just a matter of time

[Burn Notice]

General Duke;818770 wrote:

It's good to see you my friend.

Cheers GD

 

What are your thoughts on the gathering to ratify the new Puntland constitution?

 

I believe it is the final dotting of the i's and crossing of the t's to allow the big boys (most likely BP) to sign up for the offshore exploration

 

Exciting times indeed..great to see the world focusing on Somalia

[General Duke]

Burn Notice;818792 wrote:

Cheers GD

 

What are your thoughts on the gathering to ratify the new Puntland constitution?

 

I believe it is the final dotting of the i's and crossing of the t's to allow the big boys (most likely BP) to sign up for the offshore exploration

 

Exciting times indeed..great to see the world focusing on Somalia

Burn Notice, the whole of Somalia is moving in the right direction. Puntland new constitution, the new federal constitution, the leaner, smaller Parliament and the ending of the transition in Mogadishu are great signs of progress being made.

 

Yes its truly remarkable that the world is focusing on Somalia for issues outside of poverty, piracy and anarchy. Somalia is coming back and that is marvelous.

[Burn Notice]

General Duke;818812 wrote:

Burn Notice, the whole of Somalia is moving in the right direction. Puntland new constitution, the new federal constitution, the leaner, smaller Parliament and the ending of the transition in Mogadishu are great signs of progress being made.

 

Yes its truly remarkable that the world is focusing on Somalia for issues outside of poverty, piracy and anarchy. Somalia is coming back and that is marvelous.

Indeed GD...transformational