http://www.bloomberg.com/news/2014-06-09/un-says-oil-search-in-northern-somalia-risks-stoking-tensions.html
UN Says Oil Search in Northern Somalia Risks Stoking Tension
By Ilya Gridneff Jun 10, 2014 10:39 AM ET
Two semi-autonomous areas of northern Somalia have largely avoided the
violence that's plagued the rest of the country for decades. Now oil
exploration may change that, according to the United Nations.
Territorial disputes between the governments of Somaliland and Puntland, a
separatist campaign by a clan-based group and "discrepancies" in oil
licensing throughout Somalia are all contributing to simmering tensions in
the region, the UN Monitoring Group on Somalia and Eritrea said in a May 28
memorandum. Somaliland's planned deployment of an oil-protection force in
the region may also deepen the strains, it said.
"Urgent attention must be given to this issue to avoid commercial activity
triggering conflict further down the road," said Jarat Chopra, the
coordinator of the monitoring group. The document was sent to Bloomberg by
a UN official who asked not to be identified because it hasn't been
released publicly.
Somaliland and Puntland dispute a border criss-crossed by oil concessions
that have been awarded to companies including DNO International ASA (DNO)
of Norway, Vancouver-based Horn Petroleum Corp. (HRN) and RAK Gas LLC of
the United Arab Emirates. Oil deposits in Somalia may amount to as much as
110 billion barrels, according to a report published last week by the
Mogadishu-based Heritage Institute for Policy Studies. Saudi Arabia, the
world's biggest oil exporter, has 266 billion barrels of proven reserves,
BP Plc data shows.
Sovereignty Claims
Somaliland declared independence in 1991 following a coup in the Somali
capital, Mogadishu, and drew boundaries along the lines of pre-colonial
borders of the British and Italian occupied territories. Puntland, which
declared itself an autonomous state in 1998, claims parts of Somaliland in
the Sanaag and Sool regions. Khatumo, a clan-based political organization,
says it has sovereignty over land that straddles the boundary, according to
the UN monitoring group.
The prospect of further oil discoveries has sparked a "resource race" in
which different political actors are carving up oil blocks to enhance their
bargaining power against rivals, the Heritage Institute said. "The oil
factor is likely to hamper rather than help Somalia's endeavor to rebuild a
stable state," it said.
Chopra cites March clashes in Sanaag province following a visit
bySomaliland's President Ahmed Mohamed Silanyo and the deployment of forces
in Sool by Somaliland and Puntland as examples of worsening relations.
"While there has not been major conflict to report, political and military
tensions have nonetheless escalated in recent weeks," he said.
'Stop Meddling'
Somaliland Energy Minister Hussein Abdi Dualeh didn't immediately respond
to e-mailed questions. In a comment on his Twitter account on June 7,
Somaliland's president urged the UN monitoring group to "stop meddling in
the affairs of Somaliland." The semi-autonomous region will "protect its
economic assets," he said.
Since presidential elections in January, Puntland President Abdiwelli
Mohamed Ali Gaas has been lobbying Khatumo representatives and other clans
to drop their independence movement in support of Puntland, aggravating
tensions with Somaliland, the UN said. Khatumo has challenged the
legitimacy of DNO's license with Somaliland in the disputed Nugaal block.
DNO entered Somaliland in April 2013 with a block in the Nugaal valley and
have a competing claim with Horn Petroleum, which was issued a license in
the disputed area by Puntland's government.
Resolving Disputes
Horn Petroleum is working to resolve disputes over the Nugaal block with
the Puntland, Somaliland and Somali governments, along with London-based
Genel Energy Plc (GENL), DNO and others organizations like the UN, Alex
Budden, vice president of external relations for Africa Oil Corp., Horn's
parent company, said in a phone interview.
DNO's press officer Henrik Schwabe didn't respond to four phone calls and
three e-mailed requests for comment.
The UN is also concerned about the Somaliland government's plan to hire a
private security contractor to train and equip a special force to protect
oil exploration workers at a cost of as much as $25 million.
"The deployment of the oil-protection unit could play into internal and
regional conflicts that appear to be brewing within Somaliland and between
Somaliland and other regional authorities," Chopra said.
Deeq Yusuf, chief of staff in the Puntland presidency, said his government
sees the oil-protection unit as "part of the continued aggression and clan
expansion of Somaliland against the territory and people of Puntland."
Defensive Remit
Assaye Risk, a U.K.-based risk-management company, was commissioned by
Somaliland's government to design a blueprint for the oil-protection unit.
The 420-member force would provide security services to international oil
companies, allowing the country to pursue one seismic operation, said
Arabella Wickham, a director at the company.
"Within the blueprint, Assaye Risk clearly defined the operational remit of
the OPU as defensive and pre-emptive only with a mandate confined to
protective services in support of the energy industry," Wickham said. The
"government owned and commercially operated" unit would be recognized by
the UN and constituted by Somaliland law, she said.
Puntland already has a similar force known as the Explorations Security
Unit that provides protection for Africa Oil workers, according to the
Heritage Institute.
Genel, which is exploring blocks in Somaliland, suspended seismic
operations in September because of what it said was a "deteriorating
security situation." The company welcomes Somaliland's plan to boost
security, spokesman Andrew Benbow said in an e-mailed response to questions.
"Discussions continue with the government in order to facilitate a
resumption of activity," he said.
Somalia is also conducting offshore surveys and plans to hold a licensing
tender next year once they are completed, Abdullahi Haider, a federal
government adviser, said in March.
(An earlier version of this story was corrected to show that Somaliland's
government has yet to hire a private security contractor to train and equip
an oil-protection unit.)
To contact the reporter on this story: Ilya Gridneff in Nairobi at
igridneff_at_bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at
asguazzin_at_bloomberg.netPaul Richardson, Sarah McGregor
Received on Thu Jun 12 2014 - 07:27:10 EDT