Oil discovery in two Somalia areas may fuel violence, says UN

NAIROBI June, 11 2014 (SDN) — Two semi-autonomous areas of northern Somalia have largely avoided the violence that has plagued the rest of the country for decades. Now oil exploration may change that, according to the United Nations (UN).

Territorial disputes between the governments of Somaliland and Puntland, a separatist campaign by a clan-based group and “discrepancies” in oil licensing throughout Somalia are all contributing to simmering tensions in the region, the UN Monitoring Group on Somalia and Eritrea said in a May 28 memorandum.

Somaliland’s planned deployment of an oil-protection force in the region may also deepen the strains, it said.

“Urgent attention must be given to this issue to avoid commercial activity triggering conflict further down the road,” the monitoring group’s co-ordinator Jarat Chopra said. The document was sent to Bloomberg by a UN official who asked not to be identified because it has not been released.

Somaliland and Puntland dispute a border criss-crossed by oil concessions that have been awarded to companies including Norway’s DNO International, Vancouver-based Horn Petroleum and RAK Gas of the United Arab Emirates.

Oil deposits in Somalia may amount to as much as 110-billion barrels, according to a report published last week by the Mogadishu-based Heritage Institute for Policy Studies.

Saudi Arabia, the world’s biggest oil exporter, has 266-billion barrels of proven reserves, BP data show.

Somaliland declared independence in 1991 following a coup in the capital, Mogadishu, and drew boundaries along the lines of pre-colonial borders of the British and Italian occupied territories.

Puntland, which declared itself an autonomous state in 1998, claims parts of Somaliland in the Sanaag and Sool regions.

Khatumo, a clan-based political organisation, said it has sovereignty over land that straddles the boundary, according to the UN monitoring group.

The prospect of further oil discoveries has sparked a “resource race” in which different political actors are carving up oil blocks to enhance their bargaining power against rivals, the Heritage Institute said. “The oil factor is likely to hamper rather than help Somalia’s endeavour to rebuild a stable state,” it said.

Mr Chopra cites March clashes in Sanaag province following a visit by Somaliland’s President Ahmed Mohamed Silanyo and the deployment of forces in Sool by Somaliland and Puntland as examples of worsening relations.

“While there has not been major conflict to report, political and military tensions have nonetheless escalated in recent weeks,” he said.

Somaliland Energy Minister Hussein Abdi Dualeh did not immediately respond to e-mailed questions.

In a comment on his Twitter account on June 7, Somaliland’s president urged the UN monitoring group to “stop meddling in the affairs of Somaliland”. The semi-autonomous region will “protect its economic assets”, he said.

Since presidential elections in January, Puntland President Abdiweli Mohamed Ali Gaas has been lobbying Khatumo representatives and other clans to drop their independence movement in support of Puntland, aggravating tensions with Somaliland, the UN said. Khatumo has challenged the legitimacy of DNO’s license with Somaliland in the Nugaal block.

DNO entered Somaliland in April last year with a block in the Nugaal valley and have a competing claim with Horn Petroleum, which was issued a licence in the disputed area by Puntland’s government.

Horn Petroleum is working to resolve disputes over the Nugaal block with the Puntland, Somaliland and Somali governments, along with London-based Genel Energy, DNO and other organisations like the UN, Africa Oil — Horn’s parent company — vice-president of external relations Alex Budden, said.

The UN is also concerned about the Somaliland government’s plan to hire Assaye Risk, a UK-based private security contractor, to train and equip a force to protect oil exploration workers at a cost of as much as $25m.

“The deployment of the oil-protection unit could play into internal and regional conflicts that appear to be brewing within Somaliland and between Somaliland and other regional authorities,” Mr Chopra said.

Deeq Yusuf, chief of staff in the Puntland presidency, said his government sees the oil-protection unit as “part of the continued aggression and clan expansion of Somaliland against the territory and people of Puntland”.

Assaye Risk director Arabella Wickham said the 420-member oil protection unit (OPU) would provide security services to global oil firms allowing the country to pursue one seismic operation.

“Within the blueprint, Assaye Risk clearly defined the operational remit of the OPU as defensive and pre-emptive only with a mandate confined to protective services in support of the energy industry.” The “government-owned and commercially operated” unit would be recognised by the UN and constituted by Somaliland law, she said.

Puntland has a similar force known as the Explorations Security Unit that provides protection for Africa Oil workers, said the Heritage Institute.

Bloomberg