HEADLINES:

Somalia:The Next Oil Superpower?

0
Tuesday February 28, 2017 - 05:34:38 in Articles by Super Admin
  • Visits: 3969
  • (Rating 0.0/5 Stars) Total Votes: 0
  • 0 0
  • Share via Social Media

    Somalia:The Next Oil Superpower?

    Last month, Soma Oil and Gas, a London based energy company, searching for hydrocarbon deposits off the coast of Somalia, announced that it had completed a seismic survey to ascertain the potential for recoverable oil and gas deposits. Although furth

    Share on Twitter Share on facebook Share on Digg Share on Stumbleupon Share on Delicious Share on Google Plus

Last month, Soma Oil and Gas, a London based energy company, searching for hydrocarbon deposits off the coast of Somalia, announced that it had completed a seismic survey to ascertain the potential for recoverable oil and gas deposits. Although further details have yet to be released, chief executive Rob Sheppard announced that the results were encouraging. However, Somalia, and potential investors, should proceed with caution when considering entering this frontier market.

East African oil exploration, and in Somalia specifically, is not a secret. Energy firms like Royal Dutch Shell and Exxonmobil operated in Somalia before the government collapsed in 1991. But recent gains against the insurgent group al Shabaab in the south and the decrease in piracy off the coast have sparked a regeneration of the industry. The Somali president, riding these positive evolutions, recently stated that the country is "open for business.”

 

Although recent security developments are encouraging, substantial hurdles still exist. The Heritage Institute recently released "Oil in Somalia: Adding Fuel to the Fire?,” by Dominik Balthasar. The paper discusses how the oil industry in Somalia could have a promising future, but it also explores the risks facing Somalia if the development of its petroleum resources is not carefully managed. Balthasar rightly asks, "is Somalia ready for oil?”

The historic challenges that have limited business opportunities in Somalia, domestic insurgency and piracy, have diminished for now, but these threats have not disappeared. Al Shabaab has been largely pushed out of southern Somalia by multinational forces, but has recently proven that it is still able to operate in the north of Kenya. As Kenya flexes to counter al Shabaab in its own country, it could provide an opportunity for al Shabaab to return to its previous strongholds in Somalia. And even as piracy has largely stopped, it is conceivable that al Shabaab or others could see oil tankers as opportunities to resurrect that practice as well.

Beyond these security challenges there may be political disadvantages to developing the hydrocarbon sector in Somalia. Balthasar notes, among other things, that oil will likely exacerbate existing rifts and political tensions. In the context of the recent political turmoil and contentious federalism process, it is clear that any foreign oil companies would face a high degree of political instability and uncertainty. Balthasar also points out that the legal and constitutional conditions in Somalia are ambiguous in determining who can enter or negotiate contracts with oil companies. Without a well-defined regulatory environment for oil and gas resources, federal states, semi-autonomous regions, and the central government could all separately negotiate and enter into conflicting extraction agreements with private companies. The opaque regulatory nature of these resources has already proven problematic in the semi-autonomous regions of Puntland and Somaliland. Even with updated agreements on how to negotiate for and claim oil fields, Puntland and Somaliland have already leveraged their autonomy and granted their own licenses without the central government’s blessing. This is all likely to lead to further turmoil and maybe even conflict over profitable fields and the distribution of revenues.

Somalia is probably not ready for oil development. With excellent access to shipping lanes and supposedly massive untapped wealth (perhaps as much as 110 billion barrels) it is no surprise that multinational oil companies are intrigued, but responsible investors would be wise to think twice. The underlying political instability and security challenges of Somalia will likely inhibit the long term feasibility and profitability of these projects. It could also cause backsliding for the hard fought improvements in Somalia’s government.

This piece appears courtesy of CFR's Africa in Transition blog

Image: Wikicommons.

Share on Social Media

South Sudan: Kiir, Machar to meet in Khartoum next week after failed Addis talks

South Sudan: Kiir, Machar to meet in Khartoum next week after failed Addis talks Full Article

 

[Dhageyso Suratu #6 - Al-Anaam] بِسْمِ اللَّهِ الرَّحْمَٰنِ الرَّحِيمِ.Next surat (#7 - Al-Araf )

Next surat (#7 - Al-Araf ) الْحَمْدُ لِلَّهِ الَّذِي خَلَقَ السَّمَاوَاتِ وَالْأَرْضَ وَجَعَلَ الظُّلُمَاتِ وَالنُّورَ ۖ ثُمَّ الَّذِينَ كَفَرُوا بِرَبِّهِمْ يَعْدِلُونَ[١]هُوَ الَّذِي خَلَقَكُم مِّن طِينٍ ثُمَّ قَضَىٰ أَجَلًا ۖ وَأَجَلٌ مُّسَمًّى عِندَهُ ۖ ثُمَّ أَنتُمْ تَمْتَرُونَ[٢]وَهُوَ اللَّهُ فِي السَّمَاوَاتِ وَفِي الْأَرْضِ ۖ يَعْلَمُ سِرَّكُمْ وَجَهْرَكُمْ وَيَعْلَمُ مَا تَكْسِبُونَ[٣]وَمَا تَأْتِيهِم مِّنْ آيَةٍ مِّنْ آيَاتِ رَبِّهِمْ إِ Full Article

 

SOMALIA:THE KISMAYO DECLARATION OF THE NATIONAL CONSULTATIVE FORUM

COMMUNIQUE: THE KISMAYO DECLARATION OF THE NATIONAL CONSULTATIVE FORUM Full Article

 

Somalia:The hero who saved the lifes of More than 20 journalists is currently in security risk

Waagacusub.net - Hussein Baari is a young journalist and the editor of Saxafipress.com. He was among a group of journalists who were sitting at the Village restaurant near the Somalia's presidential palace in Mogadishu, on Saturday morning when a suicide bomber entered the restaurant with explosive devices. Full Article

 

Somalia:The "blood smelter." Song of don't send your money through Dahabshiil

(GalmudugNews.com) A top Somali super star Sado Ali Warsame, had released an album against the Dahabshiil money transfer which she warns the people to send their money to the company because of what the singer called 'a linkage to tribalism and extremism'. Full Article

 

Somalia:The Scandal and theft of former Somali Ambassador to Kenya -UN Report

Misappropriation of funds at the Somali Embassy in Nairobi Full Article

 

Somalia:The Sa'ad sub-clan of the Habargidir selects a young educator as their MP representative (2016)

The Sa'ad sub-clan of the Habar Gidir have elected an educator as their representative MP following two months of meetings to discuss the person who will represent the interest of the Sa'ad tribe within the Somali Parliament for the next 6 years. Full Article

 

Somalia:The Biography of the current Minister for Information

Wagacusub Media will present for the biography of Minister Maareeye starting from the government of Premier Ali Mohamed Gedi when he was the Minister for reconciliation and he initially came from Burco town in the breakaway of Somaliland. Full Article

 

Somalia:The establishment of the Galmudug regional assembly

UN Special Representative commends the completion of the establishment of the Galmudug regional assembly Full Article

 

Somalia:The Secret Pact of President's Party of Damul Jadeed with Al Ictisaam, a hard-line Islamic Group

Waagacusub.net- Somali President Hassan Sheikh Mohamoud's Islamist party of Damul Jadeed aligned with Al Ictisaam, a hard-line Islamic group to rule Southern Somalia for the coming two decades. Full Article

 


Leave a comment

  Tip

  Tip

  Tip

  Tip

  Tip


Hormuud Telecom, Taaj Express, Salaam Bank iyo Dahabshiil Money Transfer directly pay taxes to Al-Shabaab.

But Al-Shabaab derives the bulk of its funding for its operations from taxing business people and most lucrative companies in Mogadishu and control of most businesses in rural Somalia. 51 -Over the years, the terrorist group has established a well-structured and oiled taxation infrastructure supported by courts, road tolls, and loyal revenue payers. At the edge of the knife, the group's operatives demands that all business people and companies pay tax to its agents.

Al-Shabaab collected an estimated $20 million dollars from South Somalia alone - Per month

Al-Shabaab is more than just a terrorist group. In 2011, its annual revenue was in the region of $70–100 million per year. In 2018, the President of the Somali Chamber of Commerce and Industry (SCCI) confirmed that Al-Shabaab collected an estimated $20 million dollars from South Somalia alone.

Hormuud Telecom pays an estimated $200,000 every month to the Al-Shabaab

"Hormuud pays an estimated $200,000 every month to the Al-Shabaab", said a former head of Amniyat and now a top official of Somali government intelligence agency tracking Al-Shabaab movements.

Somalia A Divided Legacy: Hormuud Telecom and Political Islam

The Chairman of Hormuud Telecom Group Ahmed Nur Ali Jim'ale was a kingpin in Al-Shabaab's charcoal-sugar trading cycle that funded its activities. In September 2010, he founded ZAAD, a mobile-to-mobile money-transfer business that struck a deal with Al-Shabaab to make money transfers more anonymous by eliminating the need to show identification.

Somalia:Hormuud Telecom is the backbone of the terrorists in east and Horn of Africa

Somalia: List of former Hormuud Telecom staff members who joined the terrorists. 1- Former Al Shabab leader Ahmed Godane was a member of Al-Barakaat group in Hargeisa. 2- Head of Amniyat branch of Al Shabab Mahad Karate was part of Al Barakat group in Mogadishu.

Hormuud Telecom, Taaj Express, Salaam Bank iyo Dahabshiil Money Transfer directly pay taxes to Al-Shabaab.

But Al-Shabaab derives the bulk of its funding for its operations from taxing business people and most lucrative companies in Mogadishu and control of most businesses in rural Somalia. 51 -Over the years, the terrorist group has established a well-structured and oiled taxation infrastructure supported by courts, road tolls, and loyal revenue payers. At the edge of the knife, the group's operatives demands that all business people and companies pay tax to its agents. Full Article

 

Al-Shabaab collected an estimated $20 million dollars from South Somalia alone - Per month

Al-Shabaab is more than just a terrorist group. In 2011, its annual revenue was in the region of $70–100 million per year. In 2018, the President of the Somali Chamber of Commerce and Industry (SCCI) confirmed that Al-Shabaab collected an estimated $20 million dollars from South Somalia alone. Full Article

 

Hormuud Telecom pays an estimated $200,000 every month to the Al-Shabaab

"Hormuud pays an estimated $200,000 every month to the Al-Shabaab", said a former head of Amniyat and now a top official of Somali government intelligence agency tracking Al-Shabaab movements. Full Article

 

Somalia A Divided Legacy: Hormuud Telecom and Political Islam

The Chairman of Hormuud Telecom Group Ahmed Nur Ali Jim'ale was a kingpin in Al-Shabaab's charcoal-sugar trading cycle that funded its activities. In September 2010, he founded ZAAD, a mobile-to-mobile money-transfer business that struck a deal with Al-Shabaab to make money transfers more anonymous by eliminating the need to show identification. Full Article

 

Somalia:Hormuud Telecom is the backbone of the terrorists in east and Horn of Africa

Somalia: List of former Hormuud Telecom staff members who joined the terrorists. 1- Former Al Shabab leader Ahmed Godane was a member of Al-Barakaat group in Hargeisa. 2- Head of Amniyat branch of Al Shabab Mahad Karate was part of Al Barakat group in Mogadishu. Full Article

 

Former Intel official stripped from NISA membership

Former Intel official stripped from NISA membership Full Article

 

PM KHEYRE USELESS AND COSTY OVERSEAS TRIPS.

PM KHEYRE USELESS AND COSTY OVERSEAS TRIPS. Full Article

 

Abiy says 'New Year' will be celebrated in Eritrea, Ethiopian Airlines to resume flights

Abiy says 'New Year' will be celebrated in Eritrea, Ethiopian Airlines to resume flights Full Article

 

Massive rise in Islamist militant attacks in Africa

Massive rise in Islamist militant attacks in Africa Full Article

 

Argentina Cancels Israel Match After Messi Protests Over Palestinian Killings

Argentina Cancels Israel Match After Messi Protests Over Palestinian Killings Full Article