August 2012 saw Somalia’s first parliament since 1991 inaugurate in Mogadishu, bringing the war torn country one step closer to pivotal change. With its newly elected parliament, potential for change has never been higher. This change is assisted by Somalia’s vast oil reserve which is promising for the world’s 6th poorest country and it has predictably caught the attention of the international community who are all contending to assert their diplomatic presence in Somalia. It is no secret Somalia’s natural resources have been eyed by the international community for a long time. In fact the first ever oil well was drilled in British Somaliland in 1912 before World War 1. This was unfortunately an unsuccessful operation due to the lack of technology which left the Colonial Brits disappointed and disinterested, ultimately leading to consequential independence of British Somaliland several years later. This is quite ironic since Britain is once again leading the dash to explore Somalia’s oil. Canadian company African Oil estimated that ‘4bn barrels (about $500bn worth at today’s prices) are allocated in the two drilling plots in Putland Somalia. Other surveys indicate that Puntland province alone has the potential to yield 10bn barrels, placing it among the top 20 countries holding oil. Somalia’s This is nothing in comparison to Somalia’s offshore, as its estimated to holds more than 110bn barrels of oil which accordingly makes Somalia the 7th largest oil rich nation in the world. This brings fresh questions to whether the oil deals will benefit the Somali people or whether Somalia will go down Nigeria’s root of mainly benefiting the statesmen and oil companies. This discovery could very well trigger a momentous push to a lasting solution to Somalia’s problem, in that Somalia could find stability through wealth but it could as easily lead to more mayhem.

 

The logical assumption would be that Somalia’s control over the 7th largest oil would surely meet the needs and improve the lives of its 10 million citizens. However this might not be the case; if we take into consideration the long and extensive history of governmental violations as Somali politicians have long been involved in filling their pockets with capital, mainly from foreign aid. The UN has said that $7 out of every $10 of international aid ended up lining some power brokers pocket. The consequence is that 70% of money donated never made it into public coffers in 2009 and 2010. The chance that oil revenues will change the unofficial motto of “What’s in it for me?” is doubtful.  The new parliamentary speaker being Mohammed Sheikh Osman Jawar an Islamist lawyer who was a minster under the dictator Mohammed Said Barre in the 1980’s isn’t reassuring either. A minister for a regime that allocated two-thirds of Somalia’s oil to American Oil giants, Conoco, Amoco, Chevron and Phillips in its final years. Thus with concerns apparent the new Somali government may not be as different as it may seem.

 

Foreign multinationals are not innocent in fuelling this internal corruption in order to achieve cooperate interest. They achieve this through under table deals in which Somali officials sign away rights to Somalia’s resources for their own personal gain, rather than for the national interest. This has been evident in the oil contract signed in 2005 by the Puntland government with Range Resources whereby the Australian company (which at the time was a mining company) was sold all mineral rights in Puntland covering an area of 212,000 sq.km after giving the Putland government a modest bonus. It was the first time ever that regional or federal government has sold off all its petroleum rights to a single company in the world. Not only did they sell all the rights to one company, they sold it far less then market value.  Exploitation of Somalia corruption is once again illustrated in the secret agreement in 2009 between Somalia’s Omar Shamarka and Kenya signed a secret agreement to give Somalia continental shelf for free. This was later abolished after the information was leaked and caused public outrage. On the subject of Somalia’s offshore, Kenya, NATO and UN are pressuring the government to reduce its 400km of offshore to just 40km, a process which will give them free-rein to Somalia’s resources and legalize the illegal toxic dumping and illegal fishing that is going on right now.

 

Injustice is further demonstrated in Somalia’s National Oil Law of 2007, which by the way was written by a consortium of Canadian lawyers and Kuwait on behalf of Somalia, vastly underestimates the predicted reserves and allots some of the smallest royalties and profit sharing in the petroleum world. No other country would stand for it as it will be a massive setback to the national interest and a new acceptable national oil law that gives a fair share to the country and protects national sovereignty needs to be produced before any further oil deals are made. If negotiation are held justly and wealth is distributed fairly and morally, Somalia’s living standard, health care and education sector will most definitely soar, renovating the 6th poorest country in the world with the GDP per capita of only $600 to a well-heeled, prosperous nation. However this will not be achieved with the way things are heading.

 

Somalia’s oil crosses boarders into the internationally unrecognized Somaliland, who proclaimed independence from Somalia in 1991. Australian Oil Company Jacka Resources and London-list Ophir Energy are among the oil companies to sign exploration agreements with Somaliland. This process is not going to be black and white, as Somalia’s oil law 2007 gives Somalia 50% percent ownership of Somaliland’s oil. Bare-in-mind that oil companies are already entitled to a large percent ownership of oil found due to Somalia’s Oil Law 2007, leaving Somaliland who already loses out on foreign aid to Somalia as it’s not eligible because of it’s unrecognized status with very little. Unless negotiations are fairly held, satisfying the needs of both countries, no-one will benefit. Pressure also needs to be placed on politicians and oil companies to justly distribute the wealth and ensure that bribery doesn’t occur through secret agreements by making oil deals public. Somalia needs to enforce and strength there ocean and coastal laws and the international community needs to start respecting and applying by them. Public interest should be a priority to ovoid similar outcomes in Nigeria, who despite being the 14th world largest oil producer, large proportion of the civilians still live in slums and huts. Awareness needs to be made; otherwise Somalia’s internal issues and desperation for change will be exploited and used against in an industry it’s never been in before. Who benefits, only time will tell.

 

By Mahad Farah

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1 COMMENT

  1. why is somaliland press obsessed with Puntland Lately
    we don't mention you lots
    leave us alone
    and its called PUNTLAND not putland..!!

    • @ninja Puntland.
      JUST ignore Them somalilan/somaliloner,They are losing everywhere They went tried RECOGNITION DREAM got rejection with big RED CARD high unemployment,bad infratructure and economy,NOTHING is happening for Them.

    • crazy dar00ds imagining unicorns and dragons. who is talking about BUQLAND. You scum should be please we mention your name few times a year

  2. You mean PhutuLaan?

    The author is not one ours he is deluded and under the impression that something Cooked up in Kenya in 2007 will have any bearing on SOMALILAND and our resources. Somaliland Withdrew from UNION 1991 and does not respect any deals made by Somalia since the hijacking of the 1960 ~Union was never ratified nor approved in parliament in Somaliland. We will not be bound by any contract to in which we neither requested nor were present during it's creation. ALL contracts initiated by Somalia or any representative of their governments will be considered an act of FRAUD and will be taking to international court.

    According to the ACT of Union between Somaliland and Somalia it makes it clear that all assets of the state of Somaliland are the property of it's citizens prior to the Union and any resources within it's borders and economic zone cannot be take or sold without the approval of the somaliland citizens.

    There is no OIL in pHUTULaan as both the Darood and Shabelle were dug beyond 3,300Meters and only produced Salty water. The author is a bitter pHUTULaan member hoping SOMALILAND will share 50% of it's oil with Somalia 🙂 loool

    Cry tears of BLOOD if you like not 1 drop of Somaliland oil will ever be donated to it's ENEMY.

      • Buuxiye lool somaliland has no oil apart from the Garhajis blocks and they won't let Sii'lanyo steal their resources. Plus no one is going to touch Sool,south/east Sanaag and south Togdheer (Cayn) Nugal valley also fall under Xallin and Taleex district.

        • Khaatumo without anyone ever touching the oil in Harti degaans the rest of Somaliland has sufficient deposits to reach somaliland's 4million population!

          Harti will not refuse in sharing the deposits in BerBera. So long as non-Somalilanders do not touch one drop i mot going to comment on internal policy.

          • oil in harti regions belongs to all somalis, we all gona share it, (18 states) what makes you think we will share with someone far from Gabiley and not Garowe nighbourhood, Think it through! lool

          • khatumo as usually u think we still live 200 years ago where there are no state and only clan alliance to share everything in small village lol wake up!

          • Hornid walalo If you read it again I said (oil belongs to all somalis) we just have to figure it out way to share it. and you already know I don't believe in Seperation. loool

            Plus I only stated the truth, go convince somone from Sool to share their resources with the rest of ''Somaliland'' like Buuxiye said and not with reer Gorowe, Bosaso etc. same goes to reer Berbera would rather share with Burcoz and Hargiasa.

          • Khaatumo citizen,
            You're probably a good person with mixed feelings, at times your argument lacks a bit of logical component. The regions you mentioned in your comments belong to Somaliland. We 'll never allow a handful tribesmen to dictate our destiny.

            Somaliland has passed the stage decades ago where emotions and a soft spot for somalia were the norm. Systematic planning and precise decisions are the main drivers of Somaliland's destination. if you think you may convince some of your kinfolks should exodus to the south for a greener pasture, you're mistaking. There's no better place for them than Somaliland… and that's the fact..

          • They failed to take one barkaad (reservior) from tiny Dhulbahante subclan in Kalshaale and they want to tell us they can decide the future of Somalia and its oil. Most oil in Waqooyi Galbed and Togdheer is in Garhajis and Isse Mosse regions and none of them will ever share it or allow some few crying widows to hijack it.

            They can't even take over the cement factory and they want to tell us they can decide oil….Garhajis block is for Somalia and for all Somalis regardless of what region, it will contribute to the Somali economy which includes the separatist few villages.

            If they come with funny business we going to punish them severely.

  3. pHUTULaan signed a 50% OIL sharing deal with the TFG in 2007. Well Moqadishu is welcome to 50% of that salty water in Darood and Shabelle 🙂 loooooooooool

    It does not concern Somaliland at all 🙂

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  4. 1. Comparing Nigeria and Somalia is laughable once population is 170 million + while the other is 10 million + both living roughly in the same size of land.
    2. What about the NGO mafias that are living luxuriously on Somalia's aid money in 5 star hotels and are opening bran new offices while driving bran new cars while at the same time giving each other other fat checks in Nairobi. The Somali side which i'm not condoning are siphoning of millions what about the NGOS billions ??.
    3. Kenya's claim over Somalia's maritime waters will be resolved through the UN's Convention on the Law of the Seas (UNCLOS) which clearly states it belongs to Somalia.
    4. People are only concentrated on our oil and are forgetting our other vast sums of gas/mineral/agriculture and fish resources.
    5. Thanks to our low population living on a huge stretch of land full of resources are i'm glad to say always gonna be in win-win situation no matter what the situation.

  5. His point is not stupid. It shows that Somaliland is trying to smear off of Puntland in trying to get a piece of the pie but it aight happening. Somaliland wants to be on it is own then be it. No one is stopping and or trying to solicit her back to the union. All it has to do now is respect the rest of Somalia. The rest of Somalia will always be ONE.

    As we speak right there are lots of business minded in organizations or individuals who are of Somaliland origin who actually relocated to Mogadishu in search for opportunity and there is nothing wrong with that. It like scratch my back and I will scratch yours.

    Those of you who think Somaliland would not need other SomaliWeyn are fools who dripping Lacagta cayrta some where in Scandinavian, London or Canada.

    • I always said the need us more than we need them, is finally showing. now that we the somalia folks are getting better and our country is getting safer they want to talk and sneak their way back in our country. But is okay unlike the Isaaq we the Somalia people know how to forgive. The future is better than the past, know a day Somalia people are more educated and they travel and seeing that there is no place like Home. I said lets try Somaliaweyn one more time.

      • LOL

        You Savages are still killing each other like animals and you expect a Somalilander to care?

        Any business man that risks their life to venture south is doing so for profit and good luck to them. It just means the donkeys can't run business for themselves.

        Those that cry Somaliweyn role that up and smoke it…

        • "Any business man that risks their life to venture south is doing so for profit " LOL what does that tell you then if people from the North are willing to risk "their life" by investing in the South rather than in Somaliland hopelessness comes to mind ??

          • Don't be naive and outright stupid…

            South africa is dangerous yet somalis still venture there for profit, that does not mean there are no other opportunities.

          • Like i said before they rather go into harms way then do hopeless business in Somaliland ??

  6. "NATO and UN are pressuring the government to reduce its 400km of offshore to just 40km, a process which will give them free-rein to Somalia’s resources and legalize the illegal toxic dumping and illegal fishing that is going on right now."

    Somalia's Exclusive Economic Zone is disputed because Somalia did not use the term EEZ when it declared 200nm territorial waters in 1972. The term territorial waters were deemed problematic as the states were normally restricted to claim only 12nm territorial waters and further up to 200nm as their EEZ. Somalia signed UNCLOS in 1982 and ratified the treaty in 1989 but it did not change the terms, specify EEZ or harmonise the treaty with its national legislation covering maritime zones. It is this loophole that international fishing companies and Kenya are taking advantage of.

    However, Custemary International Law is a very important part of International Law and it takes into account both the intentions of the parties and their interactions with each other. Somalia expressed its intent to establish 200nm territorial waters in 1972 before the concept of the EEZ was widely accepted. This is why many countries like Brasil were using the term the same way as Somalia but later decided to harmonise their national legislations with that of UNCLOS. Having done that, they did not lose their original claim. Somalia's declared 200nm territorial waters in 1972 included its claim of the rights currently associated with the EEZ as it was common in the past and it should be viewed so by the international community.

    Also, Somalia issued licenses rights covering 200nm to fishing companies and these licenses were respected by the international community and the neighbouring countries included Kenya. So what has suddenly changed? There two very important aspect to the dispute of Somalia’s claim. Firstly, it is the illegal fishing and the toxic dumping in Somalia. Someone has to be responsible for these illegal acts and eventually pay the costs to the Somali people. If Somalia accepts in principle that it did not have an EEZ, it will render impossible to bring those responsible for the illegal fishing and toxic dumping to book. Secondly, the impatience of the oil companies and their greedy bosses to exploit Somalia forced them to mislead Kenya in embarking on the dispute and claim parts of Somalia’s EEZ. The uncertainty of Somalia’s situation, the lack of overarching authority made these companies unease on the legalities of the contracts that they could have signed with Somalia. Basically they could not wait. Tied with the Kenya’s opportunistic move, they think it is all over.

    It is not uncommon to have a dispute of this nature. Currently many countries have sea boundary disputes but the difference is that by signing exploration contracts with Kenya, they have given Kenya the position of the defender and Somalia the position of the challenger when these waters were claimed, licensed, utilised by Somalia and were widely accepted by Kenya in the past. If anyone has a legal claim to these waters it should be Somalia by virtue of its claim in 1972 and as well as its practice which was widely respected. By the way, Somalia’s submission of 200nm territorial waters was not brought to the attention of Somali government as being invalid by the UNCLOS.

    International community should take Somalia’s claim as an inclusion of its EEZ and should respect it.

  7. The Somali oil only belongs to the Somali Republic and its citizens. The separatists are day dreaming. They do not even have a country and they want to claim and loot the Somali Republic. This time they won't be Harshin or Harta Sheikh or Daror, you will be exterminated even before you reach the border.

    I do not get how few widows cry about Somali government, Mogadishu or even claim a Darod led government did something to them. The Somali government was trying to protect its sovereignty and its true crimes were committed in the process but it was not a collective action nor one driven by clan vs clan motives.

    If the few grievers in parts of the north claim the south did them wrong and they deserve their own state, I would to point out that al Shabab is also from the north so the northern tribes should pay blood money and damages to the south.

    If the few separatist claim is that Siad bare was southern and a Darood, we also know Ahmed Godane is an Isaaq and a northern–thus the damages cancel each others out.

    Darod led government attacked the north and Isaq led Islamists destroyed the south, thus it is best to forget everything and just move on.

    I don't see any southern crying about Ahmed Godane and blaming the entire Isaq population, the actions of Siad should not be blamed on entire southern communities who had nothing to do with it.

    I don't see Hawiye clans saying they should leave Islam because Ahmed Godane destroyed it for them and his Isaaq including Afghani, Ibrahim, Meow, etc, so what gives few Isaq grievers the right to abandon their government and state?

    Their argument is no different than the victims of al Shabab thus lets ignore them and those who are using their case, we need to bring them to justice including warlord Silaanyo.

    Silanyo, Morgan, Qaybadid, Ahmed Godane, Mohamed Dheere and the former Somali Prime Minister, mohamed Ali Samater are all wanted for crimes against humanity.

  8. It's very ironic the author knows something about the oil deals between Somalia and oil companies in 2007 but it's a quite misleading where he implied Somaliland was involved in those deals.

    In fact Somaliland had raised some concerns as Somalia was signing off the rights to explore oil in Puntland and other parts of Somalia to some fly-by-night oil firms. Thus, I'm not quite sure if the author was intentionally trying to overshadow the facts or his scope of knowledge about Somaliland is limited..
    Either way the current administration of Somaliland hired a British billionaire/lawyer of Somalilander background strictly to broker for Somaliland and it's future oil/gas explorations.. and that's the fact..

  9. Looks like the Puntland Bari Nugaal exploration is all over according to recent reports.
    no more drilling…The Aussie's seem to have left.
    It's obvious then that the real problems are now between Somalia and Kenya over what
    Brodha Gaade portrayed in his comments. These problems should be sorted out by the
    Roadmap new Somalia TG headed by President Hassan Sheikh Mahmoud with the Unpos/UN
    and the IC actors/stakeholfers. De jure Somaliland territorial colonial boundaries of the AU
    Charter is absolutely outside the scope agreements of any kind, since before or after 1991,
    Somaliland were never ever represented in any such agreements always indulged by
    incomplete leaders of Somalia. In fact, Somaliland has already begun new exploration
    agreements of their own independent from Somalia and supported by the IC actors.
    Cheers.

  11. Somalia the land of crooks! Trying to claim oil in Somaliland that doesnt belong to them. Trying to pull that oil billiliqais bs isnt gonna work this time! Orda iscuuna thats what your good at!

  14. All those saying that the Author is trying to include Somaliland in it's oil deals simply have not read the article probably. He is trying to say that Somaliland has oil of its OWN!, and because it's not recognized, Somalia is entitled to 50% when it's in Somaliland.