Puntland and Somalia Oil: Who owns the Resources? and will Oil be found?
By Dr.Mohamed Said, 11th March
2012
Somalia is
claimed to have vast resources of oil and gas in a report presented
in the late 80's by the world Bank (The Harms and Bradey Report) .
Some Study was done in the eighties by major oil companies and then
did they realize that Somalia and Sudan had the best chances of
finding oil and gas in the Eastern Africa region. Today, Sudan
produces about 500,000 barrels of Oil a day though due to politics
again that number has dwindled with the separation of Sudan into
South and North and Somalia ZERO barrels of oil a day. Why are we
in this quagmire in Somalia?
Wikileaks and other reliable sources also point to collusion between
President Abdirahman Farole and Prime Minister Abdiwali M. Ali that
they own shares through their families in Horn
Petroleum (51% owned by Africa Oil) which
was created recently in July 2011 just after Prime Minister Abdiwali
M. Ali came to power at the Transitional Federal Government based in
Mogadishu. The ownership structure also looks one sided with the
Oil companies owning 70% while the Puntland Government owns 30% -
the real question is where are the Somali Parliamentarian at both
the Puntland and TFG level who are to debate strategic issues of
this nature and why are they silent on this issue? The above solid
information should lead to the impeachment
of both Prime Minister Abdiwali M. Ali and President Farole of
Puntland for corruption and abuse of office.
Currently, the ongoing drilling for two wells in Puntland was done
without a proper technical analysis and the reasons are found here
in my humble view:
Horn Petroleum, Range Resources and Africa Oil announced recently
that they have crossed the 2053Metres with no oil but only some
shows – we knew that even before they started the drilling. They
were only stating an obvious statement. Their target or in industry
jargon TD was going to be 3800 metres (see their 7th March
report here: http://www.hornpetroleum.com/s/News_Releases.asp) –
my humble bet is, these guys will find nothing. A similar case study
can be found at what happened in 2005 offshore Kenya where Woodside
petroleum booked a health $40million tax loss and the whole public
relations fiasco of not finding oil was left to the Kenyan
Government and its Ministry of energy – a wrong spot or prospect was
drilled without proper due diligence. It took several years the
Kenyan government to bring interest back at its E&P sector.
Further, we have the following from Africa Oil ….’ The
operator has mapped numerous prospects and leads across both the
Nugaal Valley and Dharoor Valley rifts that appear to display some
of the key elements recognized within the Yemeni rift analogues. Although
the prospectivity is based solely on the loose grids of 2D seismic and
potential field data, potential play fairways and large trapping
geometries can be mapped’ – why not do more mappings?(Ref: http://www.africaoilcorp.com/s/Puntland.asp?ReportID=505141)and here http://www.africaoilcorp.com/i/pdf/Q3_Presidents_Message.pdf.
Classified Information we have gathered from reliable sources also
point to …‘a well planned process and collusion between some Arab
states and the companies drilling for oil in Puntland. The collusion
is in the form of Saracen a mercenary company with connections to
British and South African former special forces which is being
funded by the UAE government to the tune of several tens of millions
of dollars for protecting Puntland oil and gas companies from
threats of resistance and a meagre return
that the oil companies will drill at a wrong place and that they
shall be guided on where to drill for oil and gas……. That might
Result in the downgrading for the prospects of oil and gas in
Puntland and Somalia as an oil and gas province’.
The Site at Shabeele-1 was decided only on a mere couple of hundreds
of 2D seismic, no 3D Seismic, no Geochem Study, no Aeromagnetic
Study, and with a possible old data that is hard to process
which will result in ZERO finding and NO OIL at that end. According
to industry best practice and international bench-marking in
the E&P sector what this junior companies have done is like
committing treason of sorts on the technical front.
Further Studies point to… ‘There were three wells drilled within the
Nugal Valley. The two key wells drilled within the Nugaal Basin are
the Nogal 1 and Kalis-1. The drilling reports for these two wells
indicated that Lower
Cretaceous and Jurassic sandstone targets were not reached but
that oil shows were found in some of the shallower sandstones – why
not reach the targets?. The Darin 1 well drilled on the rim
of the Dharoor Valley, outside the rift valley sequence and also
off-structure, though it encountered dead or heavy oil shows in
several horizons’.
Surface oil seeps, as well as oil shows reported in several
exploration wells drilled by previous operators in the area,
indicate that the source rocks have generated hydrocarbons and that
they have migrated through the system – why not drill in this basin
first which had clear targets shown by Conoco in the late 80’s –
they spent over $150million dollars then which is equivalent of
almost $1Billion of today. Surely, will they really walk away from
their assets in Somalia and Even AGIP- ENI has block 31 on its
Balance Sheet?
The Oil companies currently drilling in Puntland will not lose
anything in this virtual transaction they will gain and post a tax
loss on the balance sheet of their companies and secondly they
can use the dry well for, yes – Nuclear waste disposal that can
generate hundreds of millions of dollars and Farole’s sons are
taking that deal by the nose. (Please see my previous article
Puntland: Is it Oil exploration or dumping of nuclear waste? http://www.galgalanews.com/?p=5587)
Finally, who really owns the assets of Oil and gas in Puntland?
Information on Wikipedia (http://en.wikipedia.org/wiki/Oil_exploration_in_Puntland) and
IHS (www.ihs.com) really question the ownership of Oil and gas in
Somalia. We heard recently that AGIP-ENI and Conoco have lodged
complaints at the Hague for violations of their concessions in
Somalia.
In Somalia, we have vast resources of oil and gas but we need to
search and manage it wisely or else we shall go the way of Libya,
Syria, Nigeria, and Afghanistan where government have collapsed or
are on the way to collapsing or in the GCC countries like Saudi
Arabia, Kuwait, UAE, Qatar where financial and political policies
are made for them and will be misguided and their finances shall be
controlled by virtual companies in tax havens.
Puntland, and Somalia at large welcome to the murky world of Oil and
Gas Geopolitics where friends and
foes cannot be differentiated on face value.
The writer is an Energy and Resources Management Consultant and can
be contacted at mohsaid87@hotmail.com
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