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Black gold.
Britain leads dash to explore for oil in
war-torn Somalia
Government offers humanitarian aid and security assistance
in the hope of a stake in country's future energy industry
Engineers and visitors tour an exploratory well in Somalia's semi-autonomous
Puntland region. Photograph: Reuters
Britain is involved in a secret high-stakes dash for oil in Somalia, with the
government offering humanitarian aid and security assistance in the hope
of a stake in the beleaguered country's future energy industry.
Riven by two decades of conflict that have seen the emergence of a
dangerous Islamic insurgency, Somalia is routinely described as the world's
most comprehensively "failed" state, as well as one of its poorest. Its
coastline has become a haven for pirates preying on international shipping
in the Indian Ocean.
David Cameron last week hosted an international conference on Somalia,
pledging more aid, financial help and measures to tackle terrorism. The
summit followed a surprise visit by the foreign secretary, William Hague, to
Mogadishu, the Somali capital, where he talked about "the beginnings of an
opportunity'' to rebuild the country.
The Observer can reveal that, away from the public focus of last week's
summit, talks are going on between British officials and Somali counterparts
over exploiting oil reserves that have been explored in the arid north
eastern region of the country. Abdulkadir Abdi Hashi, minister for
international cooperation in Puntland, north-east Somalia – where the first
oil is expected to be extracted next month – said: "We have spoken to a
number of UK officials, some have offered to help us with the future
management of oil revenues. They will help us build our capacity to
maximise future earnings from the oil industry."
British involvement in the future Somali oil industry would be a boon for the
UK economy and comes at a time when the world is increasingly concerned
about the actions of Iran, the second-biggest oil producer in Opec.
Hashi, in charge of brokering deals for the region's oil reserves, also said
Somalia was looking to BP as the partner they wanted to "help us explore
and build our oil capacity". He added: "We need those with the necessary
technical knowhow, we plan to talk to BP at the right time."
Somali prime minister Abdiweli Mohamed Ali said his government had little
choice but to entice western companies to Somalia by offering a slice of
the country's natural resources, which include oil, gas and large reserves
of uranium. "The only way we can pay [western companies] is to pay them
in kind, we can pay with natural resources at the fair market value."
Britain is not the only country looking to develop Somalia's vast natural
resources. Last month oil exploration began in Puntland by the Canadian
company Africa Oil, the first drilling in Somalia for 21 years. Hashi, who
sealed the Africa Oil deal, said the first oil was expected to be extracted
within the next "20 to 30 days".
The company estimates there could be up to 4bn barrels (about $500bn
worth at today's prices) in its two drilling plots. Other surveys indicate that
Puntland province alone has the potential to yield 10bn barrels, placing it
among the top 20 countries holding oil. Chinese and US firms are among
those understood to have also voiced interest about the potential for oil
now that, for the first time in 20 years, the country is safe enough to drill.
Yet it is the extent of oil deposits beneath the Indian Ocean that is most
exciting Somali officials. One said the potential was comparable to that of
Kuwait, which has more than 100bn barrels of proven oil reserves. If true,
the deposits would eclipse Nigeria's reserves – 37.2bn barrels – and make
Somalia the seventh largest oil-rich nation.
The state-owned China National Offshore Oil Corporation has tried to
acquire an interest in Somalia's reserves. Senior officials from the Somali
transitional government are adamant that the imminent extraction of oil in
Puntland next month would kickstart a scramble from the multinationals.
On Thursday, the last day of the London conference, BP and Shell unveiled
an initiative to support job-creation projects in the coastal regions of
Somalia. A subsidiary of Shell was thought to have acquired exploration
concessions in Puntland before the descent into lawlessness in 1991.
A BP spokesman said there were "no plans" to work in Somalia and no
official had recently visited the country.
http://www.guardian.co.uk/world/2012...?newsfeed=true
Britain leads dash to explore for oil in
war-torn Somalia
Government offers humanitarian aid and security assistance
in the hope of a stake in country's future energy industry
Engineers and visitors tour an exploratory well in Somalia's semi-autonomous
Puntland region. Photograph: Reuters
Britain is involved in a secret high-stakes dash for oil in Somalia, with the
government offering humanitarian aid and security assistance in the hope
of a stake in the beleaguered country's future energy industry.
Riven by two decades of conflict that have seen the emergence of a
dangerous Islamic insurgency, Somalia is routinely described as the world's
most comprehensively "failed" state, as well as one of its poorest. Its
coastline has become a haven for pirates preying on international shipping
in the Indian Ocean.
David Cameron last week hosted an international conference on Somalia,
pledging more aid, financial help and measures to tackle terrorism. The
summit followed a surprise visit by the foreign secretary, William Hague, to
Mogadishu, the Somali capital, where he talked about "the beginnings of an
opportunity'' to rebuild the country.
The Observer can reveal that, away from the public focus of last week's
summit, talks are going on between British officials and Somali counterparts
over exploiting oil reserves that have been explored in the arid north
eastern region of the country. Abdulkadir Abdi Hashi, minister for
international cooperation in Puntland, north-east Somalia – where the first
oil is expected to be extracted next month – said: "We have spoken to a
number of UK officials, some have offered to help us with the future
management of oil revenues. They will help us build our capacity to
maximise future earnings from the oil industry."
British involvement in the future Somali oil industry would be a boon for the
UK economy and comes at a time when the world is increasingly concerned
about the actions of Iran, the second-biggest oil producer in Opec.
Hashi, in charge of brokering deals for the region's oil reserves, also said
Somalia was looking to BP as the partner they wanted to "help us explore
and build our oil capacity". He added: "We need those with the necessary
technical knowhow, we plan to talk to BP at the right time."
Somali prime minister Abdiweli Mohamed Ali said his government had little
choice but to entice western companies to Somalia by offering a slice of
the country's natural resources, which include oil, gas and large reserves
of uranium. "The only way we can pay [western companies] is to pay them
in kind, we can pay with natural resources at the fair market value."
Britain is not the only country looking to develop Somalia's vast natural
resources. Last month oil exploration began in Puntland by the Canadian
company Africa Oil, the first drilling in Somalia for 21 years. Hashi, who
sealed the Africa Oil deal, said the first oil was expected to be extracted
within the next "20 to 30 days".
The company estimates there could be up to 4bn barrels (about $500bn
worth at today's prices) in its two drilling plots. Other surveys indicate that
Puntland province alone has the potential to yield 10bn barrels, placing it
among the top 20 countries holding oil. Chinese and US firms are among
those understood to have also voiced interest about the potential for oil
now that, for the first time in 20 years, the country is safe enough to drill.
Yet it is the extent of oil deposits beneath the Indian Ocean that is most
exciting Somali officials. One said the potential was comparable to that of
Kuwait, which has more than 100bn barrels of proven oil reserves. If true,
the deposits would eclipse Nigeria's reserves – 37.2bn barrels – and make
Somalia the seventh largest oil-rich nation.
The state-owned China National Offshore Oil Corporation has tried to
acquire an interest in Somalia's reserves. Senior officials from the Somali
transitional government are adamant that the imminent extraction of oil in
Puntland next month would kickstart a scramble from the multinationals.
On Thursday, the last day of the London conference, BP and Shell unveiled
an initiative to support job-creation projects in the coastal regions of
Somalia. A subsidiary of Shell was thought to have acquired exploration
concessions in Puntland before the descent into lawlessness in 1991.
A BP spokesman said there were "no plans" to work in Somalia and no
official had recently visited the country.
http://www.guardian.co.uk/world/2012...?newsfeed=true
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