INTERVIEW: Somalia's Puntland region rejects draft oil law
Mon 20 Aug 2007,
By Abdiqani Hassan
BOSASSO, Somalia (Reuters) - Somalia's semi-autonomous Puntland region
will refuse to recognise a proposed national hydrocarbon law that nullifies
any exploration deals struck after 1990, its most high-ranking officials
said.
Many observers expect Somalia's interim parliament to pass the
controversial bill -- widely viewed as the brainchild of interim Prime
Minister Ali Mohamed Gedi -- in coming days.
Puntland President Adde Muse told Reuters in an interview late on Sunday
that his administration planned to pass its own legislation in favour of
previous oil agreements.
Puntland awarded Australian explorer Range Resources a deal in 2005
giving it concession rights to all minerals and petroleum in the region,
which some geologists say has a high chance of sitting on commerical oil
reservoirs.
"We are willing to give the Somali transitional federal government its
due rights but we shall never break the promises we had with oil companies,"
Muse said by telephone from Puntland's administrative capital Garowe.
He said Puntland -- which declared itself semi-autonomous in 1998 with a
view to eventually joining a federal, politically stable Somalia -- was
ready to share its wealth with the government.
But Muse, who spent several days in Mogadishu taking part in private
talks at the presidential palace about the oil bill, reasserted Puntland's
authority over its own resources.
"Puntland and its resources primarily belong to us and we know what
suitable step to take against the forthcoming endorsement of the law that
deprives us of our rights," he said, without elaborating.
Somali interim government officials were not immediately available for
comment.
But Gedi told Reuters last week that valid deals cannot be struck until
the new legislation is in place and urged foreign firms to negotiate
exclusively with the interim government.
SEVERED RELATIONS?"
Somalia has no proven reserves but a joint World Bank/U.N. survey of
northeast Africa 16 years ago ranked it second only to Sudan as the top
prospective producer.
In a separate interview, Hassan Osman Mahamud, head of Puntland's
department of minerals and energy, accused Gedi of trying to illegally
acquire Puntland's hydrocarbon.
"Gedi's campaign is unlawful and we shall end our relationship with the
government if parliament passes the (draft) law," he told Reuters.
"Exploration in Puntland has been going on for the last two years and
will continue. When exploitation of resources becomes viable, a
production-sharing agreement will be negotiated," Mahamud added.
Mahamud also refused to accept the legitimacy of the proposed national
oil bill.
"The Somali petroleum law said to be approved by the parliament is not
known here and therefore does not concern Puntland in any way."
Officials from the breakaway Somaliland enclave, bordering Puntland, have
yet to comment on the draft bill which also casts doubt over the region's
claims of independence and a deal struck with South Africa's Ophir.
The two regions are believed to be home to the most promising geology,
separated as they are from the Arabian Peninsula and its huge energy
reserves by the Gulf of Aden.
By Andrew Cawthorne Reuters - Tuesday, August
14, 2007 03:09 pm
NAIROBI (Reuters) - Somalia's oil law has 85
percent support in parliament and should pass
next week, paving the way for a possible return
of Western firms which had concessions in the
1980s, plus new players, the prime minister said
on Tuesday.
Ali Mohamed Gedi, in an interview with Reuters, said
companies including Royal Dutch Shell and ConocoPhillips were in
touch with his government to initiate discussions once the
legislation went through.
Under the law, which parliament in Baidoa is due to start
discussing at the end of this week, the majors which quit when
Somalia slid into chaos in 1991 would be allowed to resume
activities in the same areas under new production-sharing pacts.
"According to the information I have, they are in touch with
government officials -- (companies) like Shell, Conoco," Gedi
said during a visit to Kenya. "They are still waiting to come
back after parliament resolves the petroleum law."
A spokesman for Chevron Corp. which also held a concession in
the 1980s, said the company had no plans to re-enter Somalia. He
gave no further comment.
Analysts say several factors -- including insecurity and
uncertainty about how long the interim government will stay in
power -- may deter Western oil majors from engaging in Somalia.
Gedi said debate on the oil law would start on Saturday [Aug
18, 2007].
"In consultation with parliament members, I feel that more
than 85 percent are convinced and are happy with the law. So it
will have the support of parliament...I think it will be passed
within next week," he said.
The 41-page draft law, seen by Reuters, gives previous
concession holders a year from the time the law comes into
effect to sign up for a production-sharing agreement.
"They will return, they will re-negotiate, in order to
maintain their interest with Somalia," Gedi said.
"There are contacts...You can feel how the oil companies are
interested in Somalia. They are not interested because of a
dream, but because of the potential."
The bill also nullifies any exploration deals struck after
1990 -- a clause that could complicate matters in Somalia's
self-declared independent region of Somaliland and the
semi-autonomous province of Puntland.
CHINESE DEAL
Both regions, in north Somalia, signed separate exploration
accords in the past five years -- Somaliland with South Africa's
Ophir and Puntland with Australia's Range Resources .
Gedi said such post-1990 deals would have to be re-struck.
"We are sticking to that position...They have to, they must."
Managing hydrocarbon policy in Puntland should not be hard,
he said, because it was "part and parcel of the national federal
government." But Somaliland was a trickier issue.
"They are still claiming to be independent. But it's not
true. So we are trying to pacify first south-central
Somalia...and then we will start negotiation for a possible
reunification of Somalia," he said.
"But until we reach that period, I think the oil companies
are not so stupid, because everything in the oil business
requires legitimacy and a recognised government, and this is the
Transitional Federal Government."
Somalia has no proven reserves, and remains a speculative
bet. But one survey of northeast Africa 16 years ago ranked it
second only to Sudan as the top prospective producer temptingly
placed in an oil window over the Gulf of Aden.
"We have confidence that oil and gas are in Somalia. And we
have already numbered the blocks...distributed all over Somalia.
It is a misunderstanding that oil potential is limited to the
north of Somalia. That is not true," he said.
Gedi said talk of a split between himself and President
Abdullahi Yusuf, a former leader of Puntland, over Somalia's
hydrocarbon policy was rubbish.
"This is how the mass media like to create differences and
confusions. But myself and President Yusuf are in agreement for
the case of oil and gas in Somalia," he said.
A deal Yusuf recently reached with China's CNOOC Ltd. in
Puntland was subject to the new law, he said.
"What the Chinese company is trying to conduct are surveys or
assessments of some areas. Assessments can be done, but when it
comes to production, it requires the law," he said.
"There are many companies assessing here or there for
potential oil and gas...But unless we put in place the petroleum
law, no production can be done."
(Additional reporting by Michael Erman in New York)
NAIROBI, Aug 10, 2007: (Reuters) - Away
from the media glare on reconciliation talks in Mogadishu,
another set of high-level negotiations is taking place in the
Somali capital.
Oil executives, lawyers and politicians
are meeting to thrash out the details of a proposed national
hydrocarbon law for Somalia, one of the final frontiers for
untapped energy reserves.
Spearheading the bill is Prime Minister
Ali Mohamed Gedi. Experts say the debate is as much about the
political tussle between him and President Abdullahi Yusuf as it
is about oil in a country where commercial reserves have yet to
be discovered.
Besides its chronic insecurity and a
transitional government still struggling to assert its
authority, Somalia remains at best a speculative bet for Western
oil majors.
According to the U.S. Energy Information
Administration, the Horn of Africa country has no proven oil
reserves and only 200 billion cubic of proven natural gas
reserves.
But that didn't stop Yusuf from signing a
production-sharing agreement with China's biggest offshore oil
and gas producer CNOOC <0883.HK> last year, the Financial Times
reported.
Gedi, who distanced himself from the deal,
has maintained that valid deals cannot be struck until the new
legislation is in place. He urges foreign firms to negotiate
exclusively with the interim government.
Oil could be vital to Somalia, a country
mired in poverty and violence since it slid into civil war when
warlords toppled dictator Mohamed Siad Barre in 1991.
POWER STRUGGLE
Jama Ali Jama, a former president of
Puntland and dissident lawmaker, also depicted the spat in terms
of a power struggle.
"The president has no right to interfere
in the executive power of the prime minister and the prime
minister has not prepared the laws and bylaws necessary for
these resources," he told Reuters in Eritrea where he is based.
"Both of them are trying to force rules
that don't exist at the moment."
Senior government officials were not
immediately available for comment on talk of a split over oil.
If the bill is passed by parliament, it
would signal a personal triumph for Gedi who appears to have
brokered a deal with Indonesia's PT Medco Energi Internasional
<MEDC.JK> and Kuwait Energy Company to acquire a 49 percent
stake in a yet to be created state petroleum firm.
Government documents obtained by Reuters
listed Kuwait Energy's chief executive officer Sara Akbar, a
friend of Gedi's, as one of the advisers to the administration.
Even if the national oil law were passed,
it is likely to be contested by the northern regions of
Somaliland and Puntland, home to the most promising geology.
Both have struck separate deals in the
past four years -- Somaliland with South Africa's Ophir and
Puntland with Australia's Range Resources <RRS.AX>.
Worryingly for Gedi, neither region is
fully part of Somalia.
Somaliland has declared independence from
the southern rump of the Horn of Africa country, though it is
unrecognised internationally.
Puntland, Yusuf's home, has declared
semi-autonomy with a view to becoming part of a federal Somalia
once the country's clan-based conflict is resolved.
NEW CLAIMS VS OLD
In a sign of Puntland's growing concern
about Gedi's proposed oil moves, its President Adde Muse has
been in Mogadishu for the past five days taking part in the
petroleum talks at the presidential palace.
Range Resources' Executive Director Peter
Landau said the proposed legislation would not stop its
operations.
"Puntland has said it will not support the
oil law unless existing rights are recognised," Landau told
Reuters.
"We're still on target to start drilling
by the end of the year. What's happening will not stop it. Even
if the oil law is passed, we'll push ahead until Puntland tells
us otherwise."
There is also the question of whether
previous concession-holders would reclaim blocks they held in
the 1980s.
ConocoPhilips <COP.N>, Chevron <CVX.N> and
Total <TOTF.PA> among others declared force majeure when civil
war broke out.
For many ordinary Somalis, oil
exploitation remains a pipe dream that may lead to foreign
domination and more instability.
"If oil companies start exploring in
Somalia I think the conflict will worsen because those who are
opposed to the government will attack the workers," said Raho
Osman, guarding the jerrycans of fuel she sells for a living in
Mogadishu.
"I believe if oil is found in Somalia then
foreign countries will certainly take over our country. The
people will not get anything -- just like other poor African
countries," she said.
Source: Reuters | Aug 10, 2007
Indon Medco Energi in JV for Somali oil firm
10 August 07 The Business Times
by Laurel Teo
In Jakarta
INDONESIA'S biggest listed oil and gas producer, Medco
Energi, has teamed up with frequent partner Kuwait Energy
Company for a stake in an upcoming Somali state oil firm.
The deal is pending approval from Somalia's Parliament, which
is debating a new hydrocarbon law this week. Details of the
legislation include the creation of the state oil company, as
well as clarification of the legal status of deals with foreign
explorers, according to Reuters reports earlier.
Medco's president-director Hilmi Panigoro confirmed the deal
when queried by the Indonesian media. In various reports
published yesterday, he said his company had been invited by the
Somali authorities to help give input and draw up the
proposedlegislation.
Medco and Kuwait Energy will also take minority stakes in the
Somali joint venture should the new law go through, Mr Panigoro
said, insisting that the size of these stakes is yet to be
decided. But a Reuters report earlier this week indicated that
both firms could jointly get almost half of the joint venture.
According to Reuters, government documents titled 'Somalia
Petroleum Policy' say a state firm will be created with a 49 per
cent stake for Medco and Kuwait Energy. And they will acquire
this stake in Somalia Petroleum Corporation by the end of the
month, pending Parliamentary approval of the new law.
The documents also say Somalia's petroleum minister will
approve three of the seven directors of the new firm - two from
Medco and one from Kuwait Energy, Reuters said.
Analysts in Jakarta have hailed Medco's move. Felix
Sindhunata, head of research at Mega Capital, said it will help
improve the company's long-term performance, given the upward
trend in crude oil prices.
But he also warned of possible risks. Speaking to local
financial paper Investor Daily, he said the unstable political
situation in Somalia means Medco has to be ready to cooperate
with security forces to safeguard its operations.
The Somali deal is the latest in a series of expansionary
moves by the aggressive Medco, which has offshore oil and gas
projects in the US, Libya and Cambodia.
The company announced plans earlier this week to spend up to
US$1.4 billion between 2008 and 2010 to boost its oil output by
about a third.
Somali PM Ali Mohamed Gedi, left, listens to his special advisor
Daniel Bourzat before giving a press conference on the final day
of AU summit in Accra [3July2007]..VOA... .Somali
Officials Deny Selling Oil Rights
Asia Pulse Pte Ltd Thursday, August 09, 2007
The country's largest private energy company PT Medco Energi
Internasional (JSX:MEDC) said will acquire a stake in the Somalia
state-owned oil and gas company Somalia Petroleum Corp (SPC).
Medco President Hilmi Panigoro said oil and gas business in Somalia is
as attractive as in Libya, the United States, Oman and Cambodia where
Medco already has oil stakes.
Hilmi said his company has received an offer from the Somali Related
Products
Project Management for the 21st Century, 3rd Ed.
International Exploration Economics, Risk, and Contracts Analysis
government to buy a stake in SPC and help modernize its oil and gas
business.
He said Somalia is drafting its oil and gas law and is in the process of
improving its administration and infrastructure.
When all the process has been completed Medco will start negotiations
with the Somali government, he said.
A report quoting official sources in Somalia said Medco would acquire a
stake in SPC by the end of this month.
(C) 2007 Asia Pulse Pte Ltd.
http:/www.rigzone.com/news/article.asp?a_id=48803
Somalia Considering Opening Up Oil Exploration To Foreign Firms
Several foreign oil companies are seeking permission to resume the
search for oil.
By . Agence France-Presse
Aug. 9, 2007 -- The Somali parliament is debating a new oil law that
would pave the way for the government to offer exploration licenses to
foreign firms. Somalia's ambassador to Kenya Mohamed Ali Nur said the
law would also see the formation of a national oil firm in the country,
which is believed to have hydrocarbon reserves.
"The law is going to be debated today or tomorrow ... I believe that
after the debate it will be passed," Nur said.
He denied a report last month in The Financial Times newspaper that
Somalia had struck oil exploration contracts with Chinese oil firms.
The Horn of Africa nation has attracted several foreign oil companies,
which are seeking permission to resume the search for oil. Somalia sank
into chaos in 1991 when dictator Mohamed Siad Barre was ousted. Before
then, geological exploration had suggested that Somalia might have
significant oil and natural gas, given its proximity to the oil-rich Red
Sea and Gulf of Aden. In the final years of Barre's rule, the northern
Puntland region was carved into blocs for American oil giants: Amoco,
Chevron, Conoco and Phillips -- the two later merged into
Conoco-Phillips. But serious exploration was prevented when civil war
engulfed the whole nation.
DUBAI: Kuwait Energy Company is assisting the development of
Somalia's oil and gas sector and has high hopes for the country's future
production, KEC's chief executive Sara Akbar told Reuters yesterday. KEC
has a preliminary agreement with Somalia to take a 49-percent stake in a
newly-formed state petroleum firm with Indonesia's PT Medco Energy
Internasional Tbk , Akbar said in a telephone interview.
I hope we will be able to assist Somalia to become a big oil and gas
producer," she said. It was too early to say what the country's
potential output was, she said. Under the terms of the preliminary
agreement, KEC also helped draw up the oil law and has also provided
technical assistance and training, she said.
The oil law sets up a framework for production sharing agreements
between international oil companies and the newly-formed state company,
she said.
She declined to say how the 49 percent stake in the state oil company
would be divided between KEC and Medco and what investment each would
make. Details would not be finalised until the oil law was agreed by
parliament, Akbar said. The law was expected to be debated this week.
KEC would undertake its investment over many years, she said.
Government documents obtained by Reuters indicated that the two firms
would acquire their stake in Somalia Petroleum Corporation on August 31.
Somalia remains a speculative bet for exploration with no proven oil
reserves, according to the U.S. Energy Information Administration, and
only 200 billion cubic feet of proven natural gas reserves.
In the 1980s, oil majors including ConocoPhillips , Chevron and Total
held exploration concessions there. They left when the nation descended
into chaos in 1991. Akbar said she had enlisted the Kuwaiti government's
help with Somalia and that her interest in the country's development was
not just commercial. "We tried get our government to help as much as we
can," she said. "Kuwait is interested in helping other Arab countries,
especially those like Somalia that need help.
Akbar said she is a personal friend of Somali Prime Minister Ali
Gedi.
Akbar is a chemical engineer who worked for state-run Kuwait Oil
Company and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) for 25
years before playing a role in the start up of KEC in 2005.
KEC is a small independent oil and gas exploration and production
company founded in 2005. It is targeting production of 50,000 barrels of
oil equivalent per day (boepd) by 2010, from 1,971 boepd at the end of
last year. The company has operations in Kuwait, Egypt, Oman, Yemen,
Russia and Cambodia. KEC is one of several small private oil and gas
companies that have sprung up in the Gulf Arab region eyeing potential
opportunities both within the region and internationally.
They are part of a wider wave of acquisitions among Gulf Arab
investors flush with cash as economies boom on record oil prices.
Regional investors acquired more than $40 billion in foreign assets in
the first half of 2007. KEC is 40 percent-owned by Kuwait's Global
Investment House, Akbar said. Aref Investment Group owns 37 percent. A
Chicago-based company owns 15 percent and the rest is with small
shareholders, Akbar added.
– Reuters.
INTERVIEW: Kuwait Energy sees big oil, gas potential in Somalia
By Simon Webb
August 08, 2007
DUBAI, Aug 8 (Reuters) - Kuwait Energy Company is
assisting the development of Somalia's oil and gas sector and has high
hopes for the country's future production, KEC's chief executive Sara
Akbar told Reuters on Wednesday.
KEC has a preliminary agreement with Somalia to take a
49-percent stake in a newly-formed state petroleum firm with Indonesia's
PT Medco Energy Internasional Tbk , Akbar said in a telephone interview.
"I hope we will be able to assist Somalia to become a
big oil and gas producer," she said. It was too early to say what the
country's potential output was, she said.
Under the terms of the preliminary agreement, KEC also
helped draw up the oil law and has also provided technical assistance
and training, she said.
The oil law sets up a framework for production sharing
agreements between international oil companies and the newly-formed
state company, she said.
She declined to say how the 49 percent stake in the
state oil company would be divided between KEC and Medco and what
investment each would make.
Details would not be finalised until the oil law was
agreed by parliament, Akbar said. The law was expected to be debated
this week.
KEC would undertake its investment over many years, she
said.
Government documents obtained by Reuters indicated that
the two firms would acquire their stake in Somalia Petroleum Corporation
on August 31.
Somalia remains a speculative bet for exploration with
no proven oil reserves, according to the U.S. Energy Information
Administration, and only 200 billion cubic feet of proven natural gas
reserves.
In the 1980s, oil majors including ConocoPhillips ,
Chevron and Total held exploration concessions there. They left when the
nation descended into chaos in 1991.
PERSONAL FRIEND
Akbar said she had enlisted the Kuwaiti government's
help with Somalia and that her interest in the country's development was
not just commercial.
"We tried get our government to help as much as we can,"
she said. "Kuwait is interested in helping other Arab countries,
especially those like Somalia that need help."
Akbar said she is a personal friend of Somali Prime
Minister Ali Gedi.
Akbar is a chemical engineer who worked for state-run
Kuwait Oil Company and Kuwait Foreign Petroleum Exploration Co. (KUFPEC)
for 25 years before playing a role in the start up of KEC in 2005.
KEC is a small independent oil and gas exploration and
production company founded in 2005. It is targeting production of 50,000
barrels of oil equivalent per day (boepd) by 2010, from 1,971 boepd at
the end of last year.
The company has operations in Kuwait, Egypt, Oman,
Yemen, Russia and Cambodia.
KEC is one of several small private oil and gas
companies that have sprung up in the Gulf Arab region eyeing potential
opportunities both within the region and internationally.
They are part of a wider wave of acquisitions among Gulf
Arab investors flush with cash as economies boom on record oil prices.
Regional investors acquired more than $40 billion in foreign assets in
the first half of 2007.
KEC is 40 percent-owned by Kuwait's Global Investment
House , Akbar said. Aref Investment Group owns 37 percent. A
Chicago-based company owns 15 percent and the rest is with small
shareholders, Akbar added.
Source: Reuters
Wednesday August 8, 7:08 PM
Somali parliament debates oil law this week - envoy
NAIROBI, Aug 8 (Reuters) - Somalia's parliament is to debate a new
national hydrocarbon law this week, a government envoy said on
Wednesday, amid controversy and questions over the status of past and
future contracts with foreign explorers.
"The hydrocarbon law is going to be debated today or tomorrow in the
parliament in Baidoa," Somalia's ambassador to Kenya, Mohamed Ali Nur,
told a news conference.
"And I believe after the debate, it will pass."
Details of the new legislation have not yet been made public, but
industry and Somali sources believe it will include the creation of a
state oil company and aim to clarify the legal status of deals with
foreign explorers.
Somalia remains a speculative bet for exploration with no proven oil
reserves, according to the U.S. Energy Information Administration, and
only 200 billion cubic feet of proven natural gas reserves.
However, in the 1980s Western oil majors including ConocoPhilips ,
Chevron and Total held exploration concessions there. They left when the
nation descended into chaos in 1991.
A World Bank and U.N. survey that year of eight northeast African
countries' petroleum potential ranked Somalia second only to Sudan as
the top prospective commercial producer due to lying in a regional oil
window across the Gulf of Aden.
NEWS SOMALI STATE COMPANY
A new U.N.-backed administration, the Transitional Federal Government,
is seeking to restore central rule to Somalia, but faces an insurgency
in the capital Mogadishu and has little real authority yet over the rest
of the country.
Experts say the interim government's "national" oil law may face
resistance from breakaway enclave Somaliland and semi-autonomous
Puntland which have both signed separate deals -- with South Africa's
Ophir and Australia's Range Resources respectively.
TFG documents seen by Reuters this week show Somalia is considering
creating a state firm -- the Somalia Petroleum Corporation -- to oversee
the sector. It would give a 49 percent stake to Indonesia's PT Medco
Energi Internasional Tbk and Kuwait Energy Company, the papers said.
Asked about the documents, envoy Nur said: "Yes, that's in the law. We
are going to have our own Somali petroleum company."
But he declined comment on Indonesian and Kuwaiti participation. "I
don't want to predict. We will wait until the law is passed," he said.
Oil has become a controversial subject in Somalia where experts say a
power struggle has emerged between President Abdullahi Yusuf and Prime
Minister Gedi over exploration rights.
Last month, the Financial Times said Yusuf had signed a
production-sharing deal with China's largest offshore oil and gas
producer CNOOC Ltd. .
But Nur said no new agreement could be struck until the national
hydrocarbon law was passed by parliament.
"Regarding the Chinese company signing an agreement with the president,
I think the prime minister has talked about that. We have not seen
officially any agreement that was signed by the president," he said.
"The government's decision was that until the law is passed, the
government will not sign any agreement with any company."
Indonesia, Kuwait Eye Somali Oil Firm
Somalia is considering creating a state petroleum firm with a 49%
stake for Indonesia's Tbk and Kuwait Energy Company.
August 07, 2007 16:51h
Somalia is considering creating a state petroleum firm with a 49
percent stake for Indonesia's PT Medco Energi Internasional Tbk and
Kuwait Energy Company, according to documents obtained by Reuters.
The government documents, titled "Somalia Petroleum Policy", indicate
that the two firms would acquire their stake in Somalia Petroleum
Corporation on August 31.
That, however, would be dependent on the passing of a national oil
law awaiting parliamentary debate, analysts say.
Prime Minister Ali Mohamed Gedi is believed to be keen to see the
draft law governing oil and gas exploration in the fractured Horn of
Africa country enacted quickly. The bill was approved by his council of
ministers in February.
The documents seen by Reuters also state that Somalia's petroleum
minister would approve three out of seven directors to the new firm --
two from Medco and one from Kuwait Energy.
There are seven officials from those firms listed in the documents as
advisers to the government, including Medco President Hilmi Panigoro and
Kuwait Energy Chief Executive Officer Sara Akbar.
Under a sliding scale production-sharing agreement, the government
and state firms would earn $1.2 billion or 69 percent of revenues if 50
million barrels were extracted at $50 a barrel.
If output rose to 350 million barrels, the state would pocket $9.1
billion or 72.8 percent, according to a spreadsheet in the documents
showing revenues minus total cost.
The documents set out acreage-based rental payments of $100 per sq
km.
Government officials were not immediately available for comment.
POWER STRUGGLE
Oil has become increasingly controversial in Somalia where experts
say a power struggle has emerged between President Abdullahi Yusuf and
Prime Minister Gedi over exploration rights.
Last month, the Financial Times said Yusuf had signed a
production-sharing deal with China's largest offshore oil and gas
producer CNOOC Ltd..
Reportedly signed last year, the agreement gives CNOOC and its
partner China International Oil and Gas the right to 49 percent of
profits from any oil they discover.
The FT also said Gedi was not aware of the deal.
"The oil law is now being adjusted and has to go through parliament.
When that's done, that's when deals can be signed," Somalia's envoy to
Kenya Mohamed Ali Nur told Reuters at the end of July.
Somalia remains a speculative bet for oil exploration with no proven
oil reserves, according to the U.S. Energy Information Administration,
and only 200 billion cubic feet of proven natural gas reserves.
However, in the 1980s Western oil majors including ConocoPhilips,
Chevron and Total held exploration concessions in Somalia, leaving when
the nation descended into chaos in 1991 with the ouster of a dictator.
The documents obtained by Reuters also stated the petroleum minister
would send a letter on September 15 to selected "prior concessionaires"
but gave no details on the contents.
The documents say at least 100 to 200 wells would have to be drilled
to determine whether there is petroleum to be found on the territory
that lies across the Gulf of Aden.
"The government could undertake this", the documents said, were it
not for the expense -- with wells costing between $4 million-$30 million
each -- the risk involved when nine out of 10 exploratory wells are dry;
and lack of specialised knowledge.
"The Somali Republic currently lacks the financial and technical
resources to explore for oil by itself," the papers said. "There are
foreign enterprises who are qualified financially and technically to do
so, and are prepared to take the explorations risks involved."
Somalia debates law to open oil exploration up to foreign firms
Wed Aug 8, 10:24 AM ET
NAIROBI (AFP) - The Somali parliament is debating a new oil law that
would pave the way for the government to offer exploration licences to
foreign firms.
Somalia's ambassador to Kenya Mohamed Ali Nur said the law would also
see the formation of a national oil firm in the country, which is
believed to have hydrocarbon reserves.
"The law is going to be debated today or tomorrow ... I believe that
after the debate it will be passed," Nur told reporters in Nairobi.
He denied a report last month in The Financial Times newspaper that
Somalia had struck oil exploration contracts with Chinese oil firms.
"The government hasn't signed any agreement with any company. We are
waiting until the law is passed in the parliament," Nur said.
The Horn of Africa nation has attracted several foreign oil companies,
which are seeking permission to resume the search for oil.
Somalia sank into chaos in 1991 when dictator Mohamed Siad Barre was
ousted. Before then, geological exploration had suggested that Somalia
might have significant oil and natural gas, given its proximity to the
oil-rich Red Sea and Gulf of Aden.
In the final years of Barre's rule, the northern Puntland region was
carved into concessional blocs to American oil giants: Amoco, Chevron,
Conoco and Phillips -- the two later merged into Conoco-Phillips.
But serious exploration was prevented when civil war engulfed the whole
nation.
Yohoo News Search
Ethiopia rebels warn oil companies to stay away
08 Aug 2007 10:50:02 GMT
Source: Reuters
More NAIROBI, Aug 8 (Reuters) - Ethiopia's Ogaden rebels warned oil
companies interested in the volatile but energy-rich region on Wednesday
not to be lulled into a "false sense of security" by the government,
saying their forces were well armed.
The Ogaden National Liberation Front (ONLF), which carried out a deadly
attack on a Chinese-run oilfield in the area bordering Somalia, said the
government had lost control of Ogaden. The rebels warned oil companies
to stay away.
"Pursuing oil and natural gas exploration activities in Ogaden at this
stage can only be characterised as gross corporate irresponsibility
given the war crimes being committed," the group said in a statement.
In the attack on the Chinese-run oilfield in April, the rebels killed 74
people and kidnapped seven workers.
The rebels say they are fighting for self-determination for their home
region. But Addis Ababa accuses them of being a terrorist group
supported by arch-foe Eritrea.
The government says a recent campaign by the Ethiopian military to
uproot the ethnic Somali guerrilla movement from the oil rich region had
been successful. The rebels deny that.
"Recent claims that the government has been able to realise military
gains are designed to give a false sense of security to oil companies
being urged ... not to abandon their exploration plans," the rebel group
said.
The Ethiopian army has deployed heavily in the region in an effort to
route out the rebels and restore order to the region.
"The regime of (Prime Minister) Meles Zenawi does not have control of
Ogaden," the rebels added.
ONLF warns against oil exploration activities in Ogaden
ONLF Press Release
7 August 2007
Recent sensational claims by the Ethiopian regime that it has been able
to realize military gains in Ogaden have no basis in reality and are
designed to give a false sense of security to oil companies being urged
by the regime not to abandon their exploration plans in Ogaden.
The Ogaden National Liberation Front (ONLF) would like to make clear
that our forces are largely intact, operational and effective. We also
wish to confirm that the regime of Melez Zenawi does not have effective
control of Ogaden, a factor which has contributed to their policy of
denying entry to international journalists and expulsion of the ICRC.
Pursuing oil and natural gas exploration activities in Ogaden at this
stage can only be characterized as gross corporate irresponsibility
given the war crimes being committed against our civilian population.
The ONLF will continue to uphold the principle of justice, democracy and
respect for human rights before oil exploration in Ogaden and as such,
we will not allow this regime to benefit from our peoples natural
resources.
Ogaden National Liberation Front (ONLF)
onlfpress@onlf.org
China's CNOOC wins Somalia oil exploration rights - report
07.15.07, 11:40 PM ET
BEIJING (XFN-ASIA) - China's state-owned CNOOC has been granted
exploration rights by Somalia's interim government, the Financial Times
reported.
CNOOC (nyse: CEO - news - people ) met with Somali government officials
last month to firm up details of its survey program, which is due to
begin in September.
CNOOC's rights cover northern Somalia's Mudug region, following a
production-sharing agreement signed in May 2006, which sets aside 51 pct
of potential revenue for the transitional government.
Somalia PM Unaware of Reported China Oil Deal
By VOA News
17 July 2007
Somali Prime Minister Ali Mohamed Gedi, 04 June 2007
Somalia's interim prime minister says he is not aware of a reported deal
that would allow China's state-run energy company to explore for oil in
the country...
READ MORE...
Somalia oil deal for China
By Barney Jopson in Nairobi
Published: July 13 2007 22:02 |
Last updated: July 13 2007 22:02
The Chinese state oil giant, CNOOC,
has won permission to search for oil
in part of Somalia, underlining
China’s willingness to brave
Africa’s most volatile regions in
its hunt for natural resources.
Somalia has been a no-go area for
US oil companies since it descended
into anarchy in the early 1990s.
This year the capital, Mogadishu,
has seen its worst violence in 16
years as insurgents seek to topple a
fragile interim government.
But CNOOC has not been deterred
and last month met Somali government
officials in a Nairobi hotel to
hammer out the details of its
planned survey work, which is due to
begin in September....
READ MORE...
ADDIS ABABA, Aug 10 (Reuters) - Ethiopia has signed a $1.9 million deal
allowing Malaysian state oil firm Petronas [PETR.UL] to develop natural
gas in its Ogaden region where rebels have warned oil companies to stay
away, an official said on Friday.
"The agreement signed between Ethiopia and Petronas focuses on the
development and marketing of Kalub and Hilal gas deposits in the
Ogaden," a Ministry of Mines and Energy official, who declined to be
named, told Reuters.
Ethiopian Minister of Mines and Energy Alemayeu Tegenu signed the
agreement with Petronas in Kuala Lumpur last month after the Malaysian
firm won a tender for the Kalub and Hilal areas, the official added.
The official said under the accord Petronas was expected to lay down a
pipeline to transport the gas to a nearby port.
Ethiopia is landlocked and possible options would be in neighbouring
Somalia where Ethiopian troops are helping the interim government --
either to Bosasso in the Puntland region or Berbera in breakaway
Somaliland, analysts say.
The Ogaden Basin, a gas-prolific area covering 350,000 sq km, is
believed to contain gas reserves of some 4 trillion cubic feet,
according to the government.
Ethiopia says it has broken the backbone of the rebel Ogaden Nation
Liberation Front (ONLF) which attacked a Chinese-run oil exploration
field in April killing 74 people.
But the separatist group denies that, and has repeatedly warned foreign
energy firms from operating in the area which borders Somalia.
"Pursuing oil and natural gas exploration activities in Ogaden at this
stage can only be characterised as gross corporate irresponsibility,"
the ONLF said this week.
Petronas is also engaged in the exploration of oil in the Gambella Basin
in western Ethiopia.
Ethiopia, Malaysian oil firm signe US $1.9 million deal
Saturday 11 August 2007
August 11, 2007 (ADDIS ABABA) — Ethiopia has signed a
$1.9 million deal allowing Malaysian state oil firm Petronas [PETR.UL]
to develop natural gas in its Ogaden region where rebels have warned oil
companies to stay away, an official said on Aug 10.
"The agreement signed between Ethiopia and Petronas
focuses on the development and marketing of Kalub and Hilal gas deposits
in the Ogaden," a Ministry of Mines and Energy official, who declined to
be named, told Reuters .
Ethiopian Minister of Mines and Energy Alemayeu Tegenu
signed the agreement with Petronas in Kuala Lumpur last month after the
Malaysian firm won a tender for the Kalub and Hilal areas, the official
added.
The official said under the accord Petronas was expected
to lay down a pipeline to transport the gas to a nearby port.
Ethiopia is landlocked and possible options would be in
neighbouring Somalia where Ethiopian troops are helping the interim
government — either to Bosasso in the Puntland region or Berbera in
breakaway Somaliland, analysts say.
The Ogaden Basin, a gas-prolific area covering 350,000
sq km, is believed to contain gas reserves of some four trillion cubic
feet, according to the government.
Ethiopia says it has broken the backbone of the rebel
Ogaden Nation Liberation Front (ONLF) which attacked a Chinese-run oil
exploration field in April killing 74 people.
But the separatist group denies that, and has repeatedly
warned foreign energy firms from operating in the area which borders
Somalia.
"Pursuing oil and natural gas exploration activities in
Ogaden at this stage can only be characterised as gross corporate
irresponsibility," the ONLF said this week.
Petronas is also engaged in the exploration of oil in
the Gambella Basin in western Ethiopia.
Source: (Reuters)
...
Ethiopia signs Petronas to develop Ogaden gas field
Reuters
Published: August 13, 2007, 22:47
Addis Ababa: Ethiopia has signed a deal allowing Malaysian state oil
firm Petronas to develop natural gas in its Ogaden region where rebels
have warned oil companies to stay away, an official said on Friday.
"The agreement signed between Ethiopia and Petronas focuses on the
development and marketing of Kalub and Hilal gas deposits in the
Ogaden," said a Ministry of Mines and Energy official, who declined to
be named. The official said $1.9 million would be paid in
"administrative costs", but gave no total value for the deal.
The Ogaden Basin, a gas-prolific area covering 350,000 sq km, is
believed to contain reserves of some four trillion cubic feet.
Ethiopian Minister of Mines and Energy Alemayeu Tegenu signed the
agreement with Petronas in Kuala Lumpur last month after the Malaysian
firm won a tender for the Kalub and Hilal areas, the official said.
The official said under the accord Petronas was expected to lay down a
pipeline to transport the gas to a nearby port.
Ethiopia is landlocked and possible options would be in neighbouring
Somalia where Ethiopian troops are helping the interim government -
either to Bosasso in the Puntland region or Berbera in breakaway
Somaliland, analysts say.
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