The oil game in Horn of Africa

ONE of the reasons that the US took a renewed military interest in Somalia after having suffered a humiliating disaster in the Horn of Africa country in 1992 seems to have emerged itself. It was and is the interest of the oil lobby in the US, which is now smelling victory in Somalia, and this should explain why Washington had waged a multi-pronged behind-the- scene campaign there — including enlisting Ethiopian help on the frontline — to oust Islamist forces from power earlier this year.

It is not that the Islamists — who were accused of harbouring Al Qaeda militant leaders — were the right choice for chaotic Somalia. Perhaps they were and perhaps they were not. But they were definitely not the right choice for the US oil lobby since they would not be amenable to the interests of American oil companies.
The clock has to be set back at least partially to the days of dictator Mohammed Siad Barre for the oil groups’ interests to be served in Somalia. For it was during the Siad Barre regime that many international oil companies were moving in to tap the hydrocarbon resources of the country. However, their plans were set back with the Siad Barre regime’s collapse and remained frozen waiting for the right opportunity to be given a new life.

That is exactly what is happening today. The right opportunity is being created in Somalia, where the UN-backed interim government and parliament are moving towards adopting a law on the country’s hybrocarbon resources.

The proposed legislation allows major oil groups that declared force majeure and quit Somalia 16 years ago to resume their activities.

Companies that held concessions before Dec.30, 1990 would be given the right to return to those areas under new production-sharing agreements. The new production deals will set out different financial terms, exploration periods and obligations as well as new block sizes.

Among the major oil companies that held oil exploration concessions in Somalia before warlords toppled Siad Barre were Royal Dutch Shell, ENI, BP, Conoco, Amoco, Phillips aand Chevron — with the last four US firms accounting for nearly two-third of potential oil fields. No doubt, they should be anxious to return although security conditions would determine the timing of their comebak.

The Gulf Today