Somaliland
Possible oil exploration deal still leaves more questions than answers
December 16, 2011 · 40 Comments
HARGEISA (Somalilandpress) — Somaliland Mining and Energy Minister Dr. Hussein Ahmed Du’ale recently spoke to SomalilandPress reporter Shiine Elmi Kahin concerning possible oil deals that the Government of Somaliland is considering entering into with foreign oil companies.
Firstly, the Minister gave lengthy explanation on the oil deals that his ministry signed with foreign firms and he told our reporter they entered an agreement with British company by the name of Ophir Energy.
He firmly denied reports published by the local press claiming in the oil deal that Somaliland will receive 2.5%. He claimed it’s been wrongly misinterpreted and it was totally baseless. “The thing is the license and the interest for the firm and the British firm is working with RAKGAS which has its share and both will receive about 75 percent. Therefore RAKGAS will earn 25 percent,” he said. He made clear that the British oil company Ophir Energy starts exploration on the ground and engineers from the firm are due to arrive in the country shortly. The Minister mentioned that the exploration survey will last for thirteen months and once it comes to an end, oil production begins in the country. He said that the profit from the oil production agreement that the government of Somaliland signed with foreign firms will be equally shared.
The minister was asked about why the Government had not drawn up a new Act of Oil and Mining (the existing one dating back to the time of the Said Barre regime). He stated that that process was underway and that they were seeking assistance in this regard from the Norwegian Government. It is hoped that the said Act will be put before the Council of Somaliland Ministers and Parliament in the near future.
In the interview, the minister was asked questions concerning different issues and he told that his ministry is in charge of an enormous portfolio including of water, minerals and energy. He stated that the Ministry was trying to tackle on-going shortages and increase water production by setting up ten water wells at Xumboweyne and Jaleel districts which are located on the North east of Hargeisa. The Minister once asked about carrying out his ministry’s strategy to find lasting solution to the water scarcity in the country’s main urban areas, he responded that this issue worries him the most and he expects to bring it to an end. At the beginning of this year, the General Manager of Hargeisa Water Agency and I went to Kenya’s capital of Nairobi and we met there with International donors and we put forward the water shortage that the country is confronted with.The minister said that the EU responded to our appeal and pledged to provide 5 per cent of the budget allocated to water supplies in Hargeisa and assured that the fund will be available soon. The minister added that if we got 50 per cent, we plan that the public as well as the government will the take the brunt of raising the rest.
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Tags: Minister Dr. Hussein Ahmed Du’ale, oil exploration, Ophir Energy, Water
Readers Comments (40)
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Somali Journalists need to be supported and trained before they become an obstacle to our existence and put our young democracy at a significant risk. I said this before and will continue to beat this drum until we overcome this issue. Well done for Somalilandexpess for doing the basic journalism action by speaking to the minister everyone was talking about negatively including some of illiterate member of Parliaments. I am not here to condemn or critice our young and inexperienced wanna be journalists, but I am pointing out a valid point to which it’s impact will have a detrimental consequences on not for our young, intellectual and bright ministers but also our pillars of democracy.
i totally agree with you Abdiwahab2-Awdal boy….I have had the same concern as well…..
An equal share is what we should demand. But I still cannot figure out how did that humiliating and hugely hated fraction 2.5% came to be published online. Was it a typing error or is something being concealed from us? What does 2.5% mean in all these negotiations?
If i am qouting him writely, the minister stated that the 2.5% share that published was about the licene fee to which our goverment agreed to contribute toward the cost, it was not about oil . The oil agreement will be second face of the process. this is a valid point which the minister explained to the reporter in Somali but it is not reflecting on this article. I am aware that there had been a few articles published in this website regarding the 2.5% share inaccurately.
Abraham
It is not typing error. I wish it was. I suggest that you visit Ophir Energy Website. It is a disgrace what the Minister has signed and it should be rejected by the Law Makers straight away.
Somalilandpress when you first wrote & published the original article about Ophire regarding the 2.5% you should have taken the time to also interview the line Minister, so you could give your readers a fair and well rounded anlayses (first rule of journalism) but you have failed on that account. Even with this current article, you have not done justice to the interview he gave your reporter. The minister has explained in depth the 2.5% but for some reason all the vital information and explaintion he gave in his interview seems to be lost in 'translation'. It's a good thing for those of us who want to get to the bottom of this 2.5%, that a reporter from another website was also present in the interview, & he seemed to have done a bettter job getting the information across. http://oodweynenews.com/news/126094-wasiirka-macd…
The original website sister which shows the license details shows 2.5% stake for the somaliland government which means if production starts then we will get that amount for our own resources. No doubt there needs to be transparency from the government since it is no 'secret' if ophir energy are publishing it on their own website – what i cant get my head around is how the so called 'government' agreed to this. We should not act so desperate despite the difficulties we face.
Somaliland is (technically) not a sovereign state, am i the only one wondering how's it legally possible to sign deals with foreign companies? What makes us different from Puntland when dealing with tiny miny "oil companies"? or Kurdistan region of Iraq who signed similar "illegal" agreements without the consent of iraqi government? all i'm saying is that similar experiences in the world have failed. Do you really expect Somaliland to become an oil producer (supposing there's oil underground) despite all circumstances around us e.g, no sovereignty or complete lack of infrastracure.
Isse, I do not think you are following the current geoplotics in this universe, wake up mate!
Maybe but you could do better and enlight me.
Exxon mobile has just recently signed a deal with Kurdistan and the small companies you have reffered to working in Kurdistan are either producing oil already or well on the way to doing so soon. Recognition of sovereignty isn't the problem it used to be……
PART 2
In 1980s Sudan and Somalia were regarded by geologists and oil experts to be most potential african countries to become oil producers. Sudan only succeeded to be so in 2000s after 1-signed peace agreement 2-huge investment from China. I see lessons to learn from Sudan but do really somalis learn from others or even from their own experiences? we all know the answer. Talking from a different political prospect (e.g. Somaliland/Somalia relationship) may upset some and somali politics isn't my thing anyway but i do think it's insult to my intelligence talking about signing agreements with tiny miny so called oil companies like it will really make us an oil producer soon like when the minister say "exploration survey will last for thirteen months and once it comes to an end, oil production begins in the country"
There needs to be evidence not what the politicians are trying to 'spin' us. If you look at the website ophir on google, you will clearly see that the somaliland stake is 2.5%. There are alot of somalis knowledgable in the field of petroleum engineering and the somaliland government needs to recruit them and make sure they are not been robbed just as west africa has been. I still have my doubts but on the positive side, once oil production starts in 13 months as they say, inshallah the citizens will reap the benefits.
Lets hope for a successful 2012 – Inshallah Khair
Perhaps you should read the following articles from respected journalists that have indicated the 2.5% share of SLD in the stake of the oil exploration : http://www.medeshivalley.com/2011/12/have-likes-o… http://www.medeshivalley.com/2011/12/ophir-energy…
It is not the young Somaliland journalists that have to take the blame , but the lack transparency on the part of SLD government in its international deals on behalf of the Somaliland people …
If I were you, I would not read Medeshivalley website. Somalidu waxy ku maahmaahdaa ninkaad kaba ka tonay kabihiisaa la eegaa
Your comment is more of a defamation than following the subject in question here.. You should have at-least said anything about the oil deal rather than attacking the website ..
Well, soo bax baa la leeyajoy Sacabka leefaysa.
I have got nothing against this website but I do not like to read all websites created specifaclly for spreading news for tribalism. The other issue is that we have the facts in front of us and you pointing us to a website controlled by a family
Adeer show some respect … this saying (Well, soo bax baa la leeyajoy Sacabka leefaysa) is not applicable here in the first hand . Secondly you seem to be a very angry person or boy irritated by something that I cannot apprehend as you replied negatively and impolitely to almost all the comments above. There is no tribalism in this website other than that in your mind .
I would advice you to act normally as you seem to be disturbed and still maturing up ….
Well said!
Looks like Ophir Energy PLC in SLD is all bogus. The SLD energy Minister and
his Govt can not finalise deals of this nature without the knowledge and approval
of the two Parliments.
Cheers.
Uneblivbeale how well-written and informative this was.
M,
The article you linked is same that post on Somalilandpress a week ago in fact both articles are by the same author. So, one woud think Somalilandpress is correcting its story by interviewing the Minister.
As for those of you who calm Ophir Energy, state on their website that Somaliland people could got 2.5 % of profit please don't mislead people
The Minister's answer to the 2.5 % is not correct. It clearly says on Ophir Energy Website that the interest is split between Ophir Energy (75%), Ras Al Khaima Gas (22.5( and Somaliland Government (2.5).
The question is now who is right, The minister or Ophir Energy website?
It is shame that this website restricted my respond to adder Ali
Somaliland Mining and Energy Minister Dr. Hussein Ahmed Du’ale has ignored to submit the mineral and patrol agreements to the parliament, and interview he gave recently to Jamhuuriya daily news paper he said its impossible to submit these agreements to the Parliament. the minister is not telling the truth about 2.5% agreement. really i dismayed about this
The 2.5% is the expenditure share of the Somali Government in the exploration opertions. If you check the web site of o[hir that contain informatuion on exploration contracts in otjher countries, the govt. shares are higher. This is apprporiategiven the financial conditions of Somaliland. Indeed, on could argue Somaliland can not afford even 2.5%. The Mintry should be up front in making the case for the rationale of its strategy. Large oil companies all Chevron, OXON, Shell, BP companies will not enter into contract with Somaliland for the time being. Somaliland should therefore accept smaller investors who are unlikely to drill and produce but have strong incentives to explore, find and sell the finds to bigger oil companies. Commissions and bonous are nromal part of doing business.
The so called minister thinks he is smarter than the Diaspora and local Somalilanders. I think he is not aware that today, Somaliland youths both inside and out side the country are connected through social media platforms such as facebook, youtube and his lies are going no where with them.
I don't know how you can go from 2.5% to 50% in matter of days without announcing a new deal and a new venture. To Ophir the old stands no matter what. It shows the Ministers lack of understanding agreements and international business deals.
We will not welcome Ophir to the country just for them to loot us. So find something else to talk about.
The so called minister should be fired like Nuh Taani.
Kasey,
Did you read the report? Or as usual you are in putting your negative comments. Blame Somalilandpress rather the minister.
Please bros and sis,
This so-called oil exploration/concession deal with S/Land gov and Ophir energy plc is a legal fantasy contract and will hardly EVER come to fruition.
We need to understand this whole speculative belief of oil/gas 'reserve' in S/Land/Somalia. It was due to the World Bank/UN three intensive research on oil/gas prospect off our Gulf of Aden coast during the late 1980s.
The findings of this research of oil/gas off the Gulf of Aden had lead to a bidding war for oil/gas exploration blocks from the leading super-majors in the than 1980s oil industry.
As Barre was still the legal/internationally recognised president of the than Somali Republic, his administration granted a 99 year lease to prominently American oil giants Conoco, Amoco, Chevron and Phillip. Two-third of the oil/gas blocks were allocated to the US oil majors due to US gov annual $100 million financial/military aid and US military use of the strategic Berbera deep-sea Port.
However, as his regime collapsed and the northern-western region of Somalia was liberated by the SNM, all the super-majors had declared force majeure!
To this day and 20 years on, all these super-majors still clam legal and exclusive rights to explore for oil/gas in Somaliland –
Chevron (ranked America's third largest company with annual profit of over $20billion!!)
ConocoPhillips (America's Fortune 500 fourth largest company with profits of $11billion)
Amoco (which is now part of BP with profits of $3billion)
Agip (Italy's largest oil company controlling several oil fields in Africa)
Ali
You are right in that these giant oil companies were given concessions during Siad Barre's regime to explore oil & gas in the blocks that you have mentioned.
You are also right in that during the war these big companies declared Force Majeure as they could not possibly continue to operate in the country due to the civil war.
However, what I feel is that many people who refer to Force Majeure do not really understand what it entails. Force Majeure Clause, which is also called in English Law 'Act of God', in any contract is invoked when an event which is outside the control of the parties takes place. As you quite rightly said war is one of those events.
Will be continued in the next comment
Furthermore, what we really need to understand is that Force Majeure frees all parties from all obligations under the contract. In our case not only did the agreement has been terminated automatically but also one of the parties [the Government of Somalia] to agreement has seized to exist and disappeared from the face of this earth.
I can go on about it more but the point I am trying to say is that these big American giants have no rights whatsoever to claim the blocks we are talking about. The agreement is longer valid.
To this end, Somaliland can sign agreements / contracts with whoever they want.
Let us hope that we will be pumping oil in a few years time!
Allaa Mahad leh.
@Abdiweli2- Awdal boy
There are ways of getting round the censorship software. I suggest you sprinkle some stars and numbers among the letters to distort the words a little. Trust me, when I reply to Piratelanders, I can use the dirty words dictionary to my heart's content without ever activating the software.
http://www.ophirenergy.com/assets/somaliland#lice… very poorly done very sad government a measly 2.5% lol like come on
All the Minister needs to do is explain the term Interest which is shown on Ophir Energy's website. As simple as that. At the moment it shows 2.5% for Somaliland Government.
Salaamu Calaykum,
Regarding this topic Somaliland goverment can not make demands while they are broke. You make demands when you have something so lets wait for the Oil inshalah and am sure then allot of things will change.
Regards,
Hello, can you please stop using the same 'Ali' name. We need to avoid any conflicting comments and opinions.
AhmedY, Thank you for your reply to my comments regarding the super-major oil companies and their concession oil blocks across Somaliland.
We need to be realistic and furthermore realise that S/Land is still not an independent nation and many international mineral/exploration legal experts would concur that the powerful super-majors still have the legal rights over the exploration blocks. And personally speaking, I would rather see the S/Land gov negotiate with the super-majors than so-called Ophir Energy. I strongly believe that Ophir Energy is just a speculative energy company with no experience in oil drilling OR even has a single operating oil well onshore/offshore.
This is highway robbery!!!!!!!
Now that Auditor General proved that there was no misappropriated money, I suggest that we let the Minister get on with job and do what he is good at doing. Period!
Furthemore, I would like to say that we need to congratulate the Auditor General and his Department for answering the public's concern. Well done Mohamoud Dheere!
Having said that, There is a huge amount of work still to be done. I think the next challenge for Mr. Mohamoud Dheere and his Department is to b ring Ali Xor Xor under control.
Berbera Port is the most important source of income for Somaliland and if it is not properly managed it can hinder Somaliliand's development aspirations
The Port is now in the hands of one the most corrupt indivuals in Somaliland (why was he re-appointed I wonder). In fact, he is not only corrupt but he is also a blatant clanist. He believes that the Port should always be managed by someone who hails from Sahil region. Rumour has it that when he was the General Manager of the port, during Rayaale's regime, the elders (cuqaal) from his clan were on the payroll of the Port.
Hadalkii oo kooban, Mohmoud Dheere feejignow oo tuugta ka ilaali dalka.
What is the contracted period? And when is it ending?