Somaliland to Sign Accord With Fourth Company on Oil Exploration
Somaliland expects to sign an agreement with a fourth international
energy company this week to begin exploring for oil in the
semi-autonomous region, Energy Minister Hussein Abdi Dualeh said.
An accord with the Middle East-based company, which Dualeh declined
to identify, has been completed, he said in a phone interview on
Nov. 21 from Somaliland. The other three companies already operating
in the country are London-based Genel Energy Plc (GENL), RAK Gas
LLC, owned by the government of Ras al-Khaimah in the United Arab
Emirates, and Oslo-based DNO International ASA. (DNO)
“All talks are concluded” with the fourth company, Dualeh said.
“It’s just a matter of inking the deal, which hopefully is going to
be this month.”
Somaliland, situated on the tip of the Horn of Africa, declared
independence from Somalia in 1991, though no country has officially
recognized it as a sovereign state. Somaliland and the neighboring
region of Puntland are part of a southward extension of the
“lucrative geologic framework of the Arabian Gulf” that includes
Saudi Arabia, according to Osman Salad Hersi, an associate geology
professor at the University of Regina in Canada. Saudi Arabia is the
world’s biggest oil producer.
Previous attempts to encourage exploration in the region foundered
because of perceptions among investors that Somaliland has the same
security concerns as neighboring Somalia, where Islamist militants
have been seeking to establish an Islamic state since at least 2006.
‘Deteriorating Security’
Last week, Genel Chief Executive Officer Tony Hayward, the former
CEO of BP Plc, announced the company was resuming operations two
months after suspending exploration work in September because of a
“deteriorating security situation.” Somaliland’s government has done
a “full-blown security assessment” to assess the threat, Dualeh
said.
The U.K. Foreign Office advises against all travel in Somaliland
because of the “high threat” that westerners face from terrorism and
kidnapping, according to its website. The U.S. State Department
warns its citizens to obtain kidnap and recovery insurance when
traveling in the region.
“There are no real threats, but nevertheless we decided to make sure
that we apply any security level that international companies need
to operate in Somaliland,” Dualeh said. “We provide full protection
for the operation, not only for Genel but for other operating
companies here.”
Genel, the biggest oil producer in the Kurdistan region of northern
Iraq, is expected to need at least two months to put its logistics
back in place before resuming exploration work next year, Dualeh
said.
Seismic work by the four companies is expected to be completed by
the end of 2014, before drilling commences in 2015, Dualeh said.
Genel is “very bullish” about finding oil in Somaliland, he said.
“There’s a parallel between their successes in Kurdistan and
successes we hope to have here in Somaliland.”
Source: bloomberg.com
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