2014-10-31
Today from Hiiraan Online:  _
Geo-resources as revenue generator for the new Somali Government

by Abdulkadir Abiikar Hussein
Tuesday, November 20, 2012


Somalia is moving slowly and steadily towards political stability and security. For some this pace is clear to notice and for many the pace is difficult to visualise. However, there is a degree of development and movement towards this end. The road map plan steered Somalia into the right place, making it possible for the war-ravaged country to stand on the brink of a bright new future. A time for a fresh start has come as some of the milestones in the road map were achieved. In addition

 

The time has come that Somalia frees itself from international donation and UN hand-outs. The Ministry of Resources has to take a lead in this effort. Some minerals need relatively long time to survey, explore and produce, while the country has some minerals that are really ready and need lesser resources to explore, develop, produce and export.

 

The country possesses a wealth of energy and mineral resourcesThese resources are undeveloped and the list includes coal, gas, oil, metallic minerals, precious metals, precious and semi-precious gemstones and construction and industrial minerals. 

Natural resource (geo-resources) development could potentially provide the vehicle to revive the Somali economy, strengthen the state,  generate revenue, provide jobs, deviate huge manpower away from piracy, fundamentalism and anti-law activities and improve in the general adherence to law and order. 

Despite these potentials, developing and exploiting the resources remain undone and the resources untapped. The information held today comes from the geological surveys in the late fifties, sixties, seventies and to some extent in the eighties. Currently, there are no government institutions except the Ministry of Resources and the Somali Petroleum Corporation (SPC). In the past, the country used to have a Geological Survey Department that ran in a Soviet style organisation:  all activities relating to natural resource development, from the initial collection and provision of geological data, to drilling and exploration, through to mining and energy extraction. However, now we have to deviate from the “command economy” to an economy based on government guidance and private ownership of companies involving themselves in minerals and hydrocarbon (oil and gas) exploration.


Like many other government institutions, the Somali Geological Survey Department, together with the past Ministry of Energy, Minerals and Water Resources [MEMWR] was demolished, burnt down, ransacked and looted during the conflict years of the early 1990s.  Unluckily, there was no information of any dedicated staff of the MEMWR who salvaged and protected documents, maps and samples as it had happened to some government ministries. Multi-million documents, agreements, maps, sample rocks and cores were thrown away and disappeared.

 

This act severely weakened the institution which was experiencing prior to this time a lack of investment and skills development and an inability to perform an active work programme. The multi-million- dollar documents, contract documents, maps, samples and cores and an entire library covering exploration for gas, oil and minerals were in the rubble and ash. 

In the past 21 years, few things happened in this sector:

 

·       A new ministry started working, now renamed as the Ministry of Resources.

·       The Somali Petroleum Corporation was launched and carried out some activities.

·       The Petroleum Law was developed so that companies wishing to explore Somalia for oil and gas can sign with the Somali government production sharing agreements.

·       We still retain the old Mineral Law which needs a complete revision and re-writing.

·       Work is going on between an oil company and the government to reach a deal on a production sharing agreement.

·       Spectrum, a geophysical company is waiting for the government’s response in order to carry out 2D-seismic survey on the offshore of the Somali Indian Ocean coast.

·       Africa Oil drilled in Puntland but one of the two wells ended dry and the other ended in water locked in Yasoman Formation.

 

The Petroleum Law (though it needs a review of the new parliament) is ready to be used by companies interested in oil and gas exploration of the Somalia. The country has eight sedimentary basins in which the existence of oil and gas is likely. The thicknesses of the sedimentary basins are such that source rocks generating oil and gas exist, in addition to reservoir rocks in which oil and gas settles down and stays in its pores. In some areas there are perfect structures that have traps and seals. The potential of these sedimentary basins to hold giant oil and gas fields is high. An intense exploration by oil companies, using recent technological advances is required to reveal what is hidden thousands of metres below the surface.

 

Immediate possible revenue for the government:     

#

Mineral

Description

Location

Amount in $

1.

Rock Salt

·       It is a formation salt, very extensive in Mudug and Galgaduud

·       Used for gritting and other purposes

Warshuba, Xiinlibi, Wisil and in near Afbarwaaqo in South Mudug

·       10 million/year

·       For export to Europe from Hobyo and El Huur ports

2.

Sepiolite

A type of clay mineral that is soft when wet and hard when it dries.

White clay material in Elbur area and NE of El Bur

·       10 million /year

·       Export to overseas

3.

Oil/gas exploration

Bid rounds scheduled in mid 2013

Offshore and onshore blocks

·       35 million

4

 

 

 

 

 

Joint-venture companies between locals and foreign companies is the best way to survey, identify, drill, develop and export mineral resources.


Therefore, it is obvious that a fresh start is the only way for a new Ministry of Resources of which its objectives (related to minerals and energy sector) are the following:

 

 

1.

To promote the proportional, efficient, and competitive use and development of energy resources in the context of decentralization and regional development, prioritizing private investment, meeting demand, as well as the employment of alternative energy in the process of rural electrification.

 

2.

To promote the development of the mining sub-sector, to impulse private investment and legal stability, to encourage the fair exploitation and implementation of clean energy technologies in small-scale mining and in the context of the process of regional decentralization.

 

3.

To promote the protection of the environment, with respect to energy and mining corporations as well as to encourage friendly relations between private entities, consumers, and civil society.

 

4.

To bring about and develop planning for the sector and its institutions, as well as the efficient and effective administration of resources.

 

5.

To advise the government on water and groundwater, environmental protection and natural hazards such as droughts, hazards and tsunamis and probably earthquakes related to the Afar depression rifting, affecting the north-west tip of Somalia.

The rebirth of a fully functioning institution, a new Ministry, is thus an urgent priority. Not only the infrastructure requires a large investment but there is a need to attract staff from the Somali diaspora and within Somalia. The new institutions should have a management and organisational structure designed to deliver high quality transparent and accountable government service. 

Furthermore, the need to re-acquire the previous information from the international partners is essential by contacting governments and companies that worked in the field of the Somali geo-resources from the 1950s up to 1990. Such move will support to establish some reference points. Then the next step is to carry out remapping as technology has progressed from analogue to digital mapping. Clearly, an up to date geological map is essential in order to meet the demands of sustainable twenty first century living and to inform and reflect advances in geological knowledge. This can only be achieved by a programme of revision mapping. IHS intends to support Somali Petroleum Corporation to do exactly this so that the basic information of Somalia is available to companies beginning to work in Somalia.

Then this is followed by the collation, assessment and reinterpretation of existing information relating to the mapping and exploration of oil, gas and coal and the other minerals. The generated digital databases and information packages should be easily accessible by a wide range of potential users.

Finally, if Somalia needs to stand on its own and lessen its dependence on international donors, then developing geo-resources quickly is an option that generates some income for the state to move forward and obtain some degree of self-reliance.


Abdulkadir Abiikar Hussein
London, UK
E-Mail: 
kadir.abiikar@hotmail.co.uk





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