Wednesday, January 18, 2012
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Canadian oil and gas exploration company Africa Oil Corp. began drilling an exploratory well in Somalia's semi-autonomous Puntland region on Tuesday, the first to be sunk in the country since civil war erupted two decades ago.While there has been speculation about finding oil in the anarchic Horn of Africa country for decades, it has no proven hydrocarbon reserves. The prospect of oil beneath Dharoor's sandy, arid plains has excited officials of the impoverished region.
"Soon Puntland will be out of hunger and shall stop asking assistance from the international community. We shall never beg, we shall be begged if the fuel comes out," Puntland President Abdirahman Mohamud Farole said at the spudding ceremony.
"This fuel well is not only for Puntland. It will benefit all Somalis if Somalia becomes one with a common constitution," Farole said, while laying a foundation stone.
Somalia, mired in conflict since warlords in the early 1990s and then Islamist militants reduced the government to impotence, represents one of the final frontiers in Africa to be explored.
Africa Oil and its partners in the two Puntland licences, Australia's Red Emperor and Range Resources, target prospective resources of over 300 million barrels of recoverable oil.
Horn Petroleum, a newly created oil explorer focused on Puntland, is drilling the Shabeel-1 and Shabeel North-1 wells within the Dharoor Valley block. Africa Oil has a 51 percent stake in Horn Petroleum.
"The drilling of Shabeel-1 fuel well is not a one-day decision; it came after much effort and agreement with Puntland," David Grellman, Horn Petroleum's president and CEO, said.
Dozens of workers buzzed around the site under the gaze of heavily armed Puntland troops. Shabeel-1 was spudded on Tuesday, and drilling operations have also started at Shabeel North-1.
The drilling in the Dharoor valley is a milestone in evaluating Somalia's oil potential, Grellman said, adding that the drilling would last 90 days.
The site is a humid, barren area of about 2,600 sq km (1,004 sq miles) near Dharoor town, some 350 km (217 miles) from the port of Bosasso on the Gulf of Aden.
The Shabeel-1 and Shabeel North-1 prospects are located on a Jurassic aged rift system, which is part of the same system that has proven to be highly productive in Yemen.
Puntland's government signed a production-sharing deal in January 2007.
Puntland faced stiff opposition from the Western-backed interim government at the time, part of which refused to honour a 2005 deal reached with Australian independent Range Resources, giving it exclusive rights over all minerals and petroleum.
Relations between Mogadishu and the Puntland authorities are on the mend. A new U.N.-backed roadmap targets a new federal constitution that brings the semi-autonomous regions into a closer relationship with central government.
Africa Oil said last year it planned to drill up to eight wells in blocks it holds interests in across east Africa, including the two in Puntland.