dont buy the champagne yet guys

Somalia sees return of oil majors on new lawPublished: Thursday, 16 August, 2007, 06:27 AM Doha Time

NAIROBI: Somalia’s oil law has 85% support in parliament and should pass next week, paving the way for a possible return of Western firms which had concessions in the 1980s, plus new players, the prime minister said on Tuesday.
Ali Mohamed Gedi, in an interview with Reuters, said companies including Royal Dutch Shell and ConocoPhillips were in touch with his government to initiate discussions once the legislation went through.
Under the law, which parliament in Baidoa is due to start discussing at the end of this week, the majors which quit when Somalia slid into chaos in 1991 would be allowed to resume activities in the same areas under new production-sharing pacts.
“According to the information I have, they are in touch with government officials – (companies) like Shell, Conoco,” Gedi said during a visit to Kenya. “They are still waiting to come back after parliament resolves the petroleum law.”
A spokesman for Chevron Corp which also held a concession in the 1980s, said the company had no plans to re-enter Somalia. He gave no further comment.
Analysts say several factors – including insecurity and uncertainty about how long the interim government will stay in power – may deter Western oil majors from engaging in Somalia.
Gedi said debate on the oil law would start on Saturday.
“In consultation with parliament members, I feel that more than 85% are convinced and are happy with the law. So it will have the support of parliament...I think it will be passed within next week,” he said.
The 41-page draft law, seen by Reuters, gives previous concession holders a year from the time the law comes into effect to sign up for a production-sharing agreement.
“They will return, they will re-negotiate, in order to maintain their interest with Somalia,” Gedi said.
“There are contacts ... You can feel how the oil companies are interested in Somalia. They are not interested because of a dream, but because of the potential.”
The bill also nullifies any exploration deals struck after 1990 – a clause that could complicate matters in Somalia’s self-declared independent region of Somaliland and the semi-autonomous province of Puntland.
Both regions, in north Somalia, signed separate exploration accords in the past five years – Somaliland with South Africa’s Ophir and Puntland with Australia’s Range Resources.
Gedi said such post-1990 deals would have to be re-struck.
“We are sticking to that position...They have to, they must.”
Managing hydrocarbon policy in Puntland should not be hard, he said, because it was “part and parcel of the national federal government.” But Somaliland was a trickier issue.
“They are still claiming to be independent. But it’s not true. So we are trying to pacify first south-central Somalia ... and then we will start negotiation for a possible reunification of Somalia,” he said.
“But until we reach that period, I think the oil companies are not so stupid, because everything in the oil business requires legitimacy and a recognised government, and this is the Transitional Federal Government.”
Somalia has no proven reserves, and remains a speculative bet. But one survey of northeast Africa 16 years ago ranked it second only to Sudan as the top prospective producer temptingly placed in an oil window over the Gulf of Aden.
Gedi said talk of a split between himself and President Abdullahi Yusuf, a former leader of Puntland, over Somalia’s hydrocarbon policy was rubbish.
“This is how the mass media like to create differences and confusions. But myself and President Yusuf are in agreement for the case of oil and gas in Somalia,” he said. – Reuters