Home > Africa, Conflict & Security, Economics, Politics > The dangerous smell of crude oil that may ignite a new civil war in Somalia

The dangerous smell of crude oil that may ignite a new civil war in Somalia

Aden Yabarow writes in Awdal News Network:

Reports written by major newspapers including Sharq Alawsat in the nineties stated that Somalia has estimated oil reserves of over 10bn barrels and has 200 billion cubic ft of proven gas reserves. Since mid fifties major oil companies were doing sporadic surveys in the hope of producing commercial quantities of oil from onshore and offshore Somalia. The biggest major exploration was carried out in independent Somalia and the occupied Ogaden in the fifties by western oil companies such as Sinclair Oil Corporation, Standard oil and the current estimates are either based on old technology used at the time or estimates made in the seventies and eighties. In the eighties few major oil companies showed their interest in Somalia and gained concessions from the last government of Somalia . ConnocoPhilips, Amoco, Shell, Chevron and Agip were among these Western Companies and ceased their operations in 1988 and 1990 after declaring force majeure. Range Resources an Australian oil company which signed an exploration deal with Puntland recently estimates about 5bn to 10bn barrels of oil in Puntland including Mudug region.

…After 1990 oil deals became complex and frightening as some warlords were approached by some of the Western oil companies who wanted to renegotiate the agreements in exchange of both financial support and political lobbying. Reliable sources named both Ali Mahdi and Gen. Aidid and said that both men accepted in principle a deal which suggested a 25% share of the oil revenues for the Somali side, 50% share for the oil companies and the remaining 25% to cover the costs for a period of 50 years. But after the infamous 1991 fighting between the two men prevented the signing of any agreement as the security situation deteriorated.

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