Somaliland: President set to ring changes as country gears up to attract Big Oil
Upstream, July 27
Barry Morgan
Egal eyeing his prey
Drastic changes will soon be made in Somiland President Mohammed Egal's cabinet and one of the first to shift will likely be the incumbent Minister of Mineral Resources and Water Mohamoud Abdi Farah.
Egal is understood to favour removing hydrocarbons from the ministerial portfolio and charging an independent Commission for Petroleum in order to de-politicise this sector.
That is a tall order. Somaliland's 2.4 million population is split into myriad clan groupings whose members besiege ministerial offices all day in a routine bid to secure jobs and commercial advantage.
Far from being a corrupt practice, this procedure is part of the political substructure that underpins the democratic veneer of the state and makes it work. To keep peace among the sub-clans, Egal has staffed no fewer than 26 ministries to serve what is in effect a dormant economy based on small-scale livestock herding and the distribution of an imported narcotic.
Known locally as Cha't - bunches of green leaves chewed by all - this powerful amphetamine kicks in to the national lifestyle at around 2pm, whereupon no business of any kind can be done until the following day.
Dubbed "speed" in the West, Cha't has been thoroughly socialised throughout Somalia, but visitors should note that fatigue sets in swiftly, alongside amnesia. Nonetheless, bona fide explorers can expect the welcome mat to be laid out on arrival.
"We are trying to find the right companies who are able to explore our resources. Force majeure or not, the Somaliland government has terminated all the concessions signed by the Siad Barre regime after we tried to correspond with the majors in 1992 and they ignored us," says Farah. "But they are welcome to come back and deal with us if they still have an interest."
A standard production sharing contract under a code drawn up with World Bank funding in 1982 is in place under which all points are negotiable after capital and field assessments have been examined.
"Up till now only the Abu Dhabi-based International Petroleum Company has responded," says Farah. He says the reluctance of the big oil companies simply strengthens rival Somali capital Mogadishu's determination to force Somaliland into a union they do not want.
"After 'independence' in 1960 we were pushed into another colonial situation and these companies are trying to keep us in that condition - that's why we fought Barre," says Farah.
Allied neither to Hargeysa nor Mogadishu but wedged between both is the Biblical Land of Punt, ruled by warlord Abdulai Yusuf, whose acreage was much sought after by majors. Yusuf tried to subvert Hargeysa's referendum by organising a boycott. He failed, but the affair cast a shadow over Hargeysa's plans to kick-start exploration there.
Minister of State for Foreign Affairs Qasim Yusuf Ibrahim says he cannot wait another 10 years for recognition by either the oil companies or the international community. "We're going to tell Somalilanders to show the world we have peace and stability here. From now on the door is wide open for investors," he says.
Meanwhile, UN sources say the Chinese have been "taking oil samples" south of the Punt capital Bosasso for two months now and plan to move offshore.
Interested suitors should also heed the regime's insistence on transparency. Former oil minister and geologist Ahmed Behi was abruptly fired by Egal last year for making mistakes in a deal on block-35 with Malaysian-based Zarara Petroleum.
The chief executive of an Australian exploration company with long experience in Africa says: "If they can give us the flexibility to do the basic geophysical work under some sort of partnership, then we would need a long period to push through investment and review prospectivity before promoting acreage to third parties."
A technical source close to the presidency is more candid about the solution. "Recognition is the key, but I think it would work well if Big Oil could come over using a small front company, just as long as we here know what's what and who's who," he says. |
