Oil can be a boon for Somalia
Sunday, April 29, 2012
By Nima Khorrami Assl
The African nation has a real chance to set in stone the foundations of a better country for its people
Ever since the fall of the Somalia’s pro-US president, Mohammad Siad Barre, in 1991, the country has been in a state of chaos and disorder. In the absence of a central authority, tribal conflicts, warlordism, and a resurgent militancy in the form of Al Shabab have come to dominate and define the political reality of Somalia.
Economic stagnation and lawlessness, moreover, have given rise to one of the oldest profession’s in human history, thereby turning a dangerous majority of the bright yet hopeless Somali youths into the world’s most prominent pirates. And as if this is not depressing enough, an unfortunate geography combined with a lack of state-planning have brought food insecurity and malnutrition to the proud inhabitants of this ancient land.
That Somalia has not received a single piece of positive coverage over the past 20 years, therefore, ought not to be surprising. After all, this is the “most comprehensively failed state” where human suffering starts at birth. However, Somalia’s fortune might be about to change. This anticipated alternation, in turn, is not because Al Shabab’s power and influence is ebbing. Nor is it due to the approaching expiration of the Transitional Federal Institutions mandate which some claim will help to support a more inclusive political process. Rather, it is in the renewed international interest in Somalia as an oil producing nation that one can trace a fast-changing geostrategic role for Somalia; one that will no longer be confined to counter-terrorism and anti-piracy efforts.
After British Prime Minister, David Cameron, hosted an international conference on Somalia on February 23, The Observer revealed that London has been in a “secret high-stakes dash for oil in Somalia” in return for British humanitarian aid and security assistance. The revelation and British Foreign Minister William Hague’s comments during his visit to Somalia, where he talked about “the beginnings of an opportunity to rebuild the country”, cast a question mark over London’s, and indeed the entire western world’s humanitarian endeavours with some commentators going as far as dubbing the summit as ‘aid for oil’.
To be sure, there is nothing new or unique about Britain’s apparent interest in Somali oil. Instead, this is a continuation of US policy between the 1950s and the early 1990s when giant American oil companies, such as Conoco and Chevron, had obtained the right to explore Somalia in three major phases. The American government, especially the Administration of George H.W. Bush, had a national security interest in these projects as it was keen on “developing crude oil sources in the regions away from the Strait of Hormuz”.
As a matter of fact, some analysts allege that the key reason behind Washington’s decision to dispatch US troops to Somalia in 1991 was less about safeguarding aid shipments and more about protecting Conoco’s multimillion-dollar investments there. Conoco had made “very good oil shows”, and that it was adamant to stay on though it eventually cited force majeure and the whole issue of Somali oil was suddenly put to rest.
Situated within an ‘oil window’, Somalia is certainly a prospective for gas and oil production. In other words, there is no doubt among western policymakers that there is oil in Somalia but they just do not know how much. Their assumption is backed by various studies conducted by the World Bank and the Texas-based Hunt Oil Corp. According to a 1991 World Bank study, ‘the geological parameters’ in the Puntland are “conducive to the generation, expulsion and trapping of significant amounts of oil and gas”. After its successful exploration efforts in southern Yemen in the mid 1980s, Hunt Oil too reached the same conclusion claiming that “the estimated one billion barrels of Yemeni oil reserves were part of a great underground rift, or valley, that arced into and across northern Somalia”.
Following in the footsteps of the US government, thus, Britain, China, India, Canada, and Australia have now a national security interest in exploring Somali oil. This is, among other things, due to the fact that the sub-region of Gulf is set to undergo a prolonged period of strategic uncertainty and political instability, and that involvement in the future Somali oil industry would be ‘a boon’ for the their economies.
To this end, Horn Petroleum Corporation, a subsidiary of Canada’s Africa Oil, began its oil exploration operations in the arid north-east of Somalia in February, drilling two wells to a depth of 3,800m for the very first time in 21 years. Chinese giant corporation, China National Offshore Oil Corporation (CNOOC), has also been granted legal permission from Somalia to drill for oil, which, in and by itself, is yet another proof of China’s desperate need for alternative energy sources other than those from the Middle East.
Similarly, India has started making approaches to get a piece of the Somalia oil. New Delhi has proposed to train the future Somalia army, increased its trade ties with Somalia, and integrated Somalia into its e-network “to prop and increase” Somalia’s IT capacity. British Petroleum, finally, is in talks with the Putland authorities to gain exploration rights and has already unveiled an initiative to support job-creation projects in the coastal regions of Somalia.
Given Somalia’s geostrategic location and proximity to strategic waters in the Horn of Africa, there are good reasons to be optimistic that if adequate amount of oil is found, Somalia could, over the medium term, become a major trading hub and an attractive destination for foreign investment. There is no public infrastructure to speak of and the means of transportation are literally nonexistent. Discovery of oil as well as its need for large-scale infrastructure projects, in essence, will catalyse what human suffering over the last 20 years has failed to do: a genuine push by the international community to put an end into Somalia’s social, political, and economic problems.
For the first time in many years, therefore, the Somali nation has a real chance to set in stone the foundations of a better, more prosperous country for its future generations. For this to happen, nonetheless, Somali politicians and tribal leaders must show a high degree of pragmatism, seeking to cooperate in the national, as opposed to tribal, interests or else risk disintegrating Somalia into two separate states. Somalia is fragmented into a multitude of ethnic lines with plenty of transitional governments who could very well be tempted to use their newly-found wealth to advance their own specific agendas and score political points against one another.
There is also a need to establish a legal framework in order to determine oil revenue-sharing procedures, and reduce the likelihood of corrupt practices by officials. Needless to say, there is an important role for the international community in all these, since Somalis themselves lack the required legal and financial expertise for such undertakings. Most importantly though, the international community should waste no time in mediating between Kenya and Somalia who seem to be in a disagreement over the location of their boundary line in the Indian Ocean. At stake are their “legal claims to sell rights for exploration and collect revenue from any discovery”, and hence their disagreement can easily turn into a full-blown conflict should it remain unresolved.
Nima Khorrami Assl is a security analyst at Transnational Crisis Project in London.
This article was originally publised in Gulf News