quarterly says it all!!!, page-57

***somali prime minister** What can one make of this...loooks suspect..isnt this the kind of shi* that RTM went through?

PERTH exploration minnow Range Resources has had its astonishing deal for exclusive petroleum and mineral rights in the Puntland region of Somalia called into question by the Somali government.

In a letter to the Australian Stock Exchange but not released to the market, Somali Prime Minister Ali Mohamed Gedi said the deal with the regional government in the eastern Somali state of Puntland was invalid because only the country's transitional federal government could negotiate the sale of mineral and petroleum rights, The Age newspaper reported.

Gedi has offered to cooperate in any investigation into Range Resources's claims, according to the newspaper, which said it had obtained a copy of the letter.

This contradicts a statement on Range Resource's website, which reads: "The Transitional Federal Government of the Republic of Somalia has provided written approval with regards to the validity, operation and effect of the Puntland agreement subject only to amendments being made to the Contract of Work to reflect the constitutions of both the Federal and Puntland Governments."

Range Resources has also said the government of Puntland was democratically elected and independent and had the power to negotiate and sign the contract with Consort Private.

On October 5, Range announced it had agreed with a foreign company, Consort Private Ltd, to buy 50.1% of the sole and exclusive rights to all mineral and oil exploration and development in Puntland.

Consort Private is believed to operate through a London law firm and to be registered in the Maldives. It signed a contract with the Puntland government on August 30 at Dubai's Hilton Hotel.

Range Resources plans to fund the deal through a $3.45 million rights issue.

The deal between Puntland and Consort has been very controversial in Somalia and has increased tensions between the federal and Puntland governments.

On August 28, just two days before the contract was signed, the Somali prime minister warned foreign companies and investors that local administrations could not legally negotiate contracts over natural resources.

"Foreign companies should desist in attempts to deal with local authorities ... without prior written consent from the federal government," Gedi said.

"Any violation of this will result in negative consequences and the responsibility will lie with the culprits. Until the government puts in place specific legislation for natural resources management, such as a national hydrocarbon law, it will be categorically impossible to give concessions."

Meanwhile, a Somali resource and management consultant living in Melbourne has also weighed into the debate, criticising the Range Resources deal on several grounds.

Dr Ali Abdullahi M Barkadle said the Puntland contract gave an unfair advantage to Consort Pty Ltd and Range Resources by lumping together mining and oil concessions and giving the whole state – roughly 212,000 square kilometres – to a single company was unheard of.

"It seems the negotiators had a very limited understanding of the mining and oil industry or were in need of quick money, Barkhalde said.

"Puntland can be divided into many blocks using modern GIS systems. The area of 212,000sq.km is too huge for a viable study to be done on. Even multinational corporations with huge budgets for explorations cannot bite into such a huge cake without damaging shareholder value."

Barkhadle also said the Puntland government had handed over areas that have been in "force majeure" without due consent from original concession holders.

"Somalia had issued a number of concessions and prospecting licenses to a number of International Oil companies in the 80s when Hunt oil discovered oil in Yemen that protruded into Somalia," he said.

"Ownership questions still remain since most of these companies declared force majeure."