Somaliland
says open for oil business, pirates beware
Tue Nov 1, 2011 5:04pm GMT
By Ed Stoddard
CAPE TOWN (Reuters) - The break-away territory of Somaliland is open
for hydrocarbon busi ness and has a message for investors worried by
its rough neighborhood: this is not Somalia and pirates here go to
jail.
Hussein Abdi Dualeh, the minister of energy and mining, said it was
unfair to lump Somaliland with lawless Somalia, where pirates have
captured oil tankers and headlines.
"We have no navy to speak of but what deters pirates is the prison
sentences they get, 25 years or more. We have been successful in
catching them with limited resources," Dualeh told Reuters on the
sidelines of an African oil conference.
"We have over 100 pirates in our prisons," he added.
Dualeh earlier told the conference that Somaliland, which declared
independence from Somali a in 1991 but has not been formally
recognised internationally, had seen almost no explorati on but had
huge potential with a geology similar to basins containing 9 billion
barrels across the Gulf of Aden.
He said three firms -- London listed company Ophir Energy, Asante
Oil and Prime Resources -- had just signed deals with his government
under which they will have 18 months to explore, conduct seismic
tests and identify wells.
Ophir has a track record in the region with gas discoveries off the
coast of Tanzania.
Only 21 wells have been drilled in Somaliland, making it under
explored even by the frontier st andards of the region, where the
oil and gas industries are in their infancy.
The minister said a number of big oil companies with permits to
operate there left what is now Somaliland in the late 1980s and
declared force majeure during Somalia's escalating civil conflict.
"We are talking about the big boys like Chevron, Conoco. We asked
them to come back for ye ars but they would not. Now it's a clean
slate," he said, adding they must reapply for permits or
concessions.
"It's been over 20 years so they no longer have a legal interest in
Somaliland," he said.
Offshore East Africa has yet to produce a commercially viable oil
source but gas discoveries off Mozambique and Tanzania have prompted
great interest.
Oil discoveries would be a cash boon to Somaliland though
hydrocarbons have often proven to be a curse to African nations as
the opaque nature of the industry can breed corruption.
Dualeh said he had recently been to Norway and preferred its oil
revenue model to Nigeria's, where tens of billions of petro-dollars
have been stolen or squandered over the decades and oil dependency
has undermined other sectors of the economy.
"Norway is a model we can at least aspire to ... they have managed
to protect their other sectors without letting oil crowd them out,"
he said.
Source:Reuters
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