NATURAL RESOURCES | Somalia is a country endowed with plenty of natural resources, both on land and along the coast. Puntland is strategically located at the very tip of the Horn of Africa region and its coast touches on the Indian Ocean and the Gulf of Aden, providing a maritime gateway between Europe and Asia. Historically, this region was known as the “Land of Punt” where Ancient Egyptian rulers visited and traded unique items such as myrrh. In the 1980s, major oil companies in the West signed contracts with then-Somali President Mohamed Siad Barre to explore for oil in different blocks of Somalia. In the Puntland regions of the northeast, U.S. oil giant Conoco (now Conoco-Phillips) attained concession rights for oil exploration to the largest block in the Puntland regions. By 1991, however, Western oil majors declared force majuere and pulled all staff out of Somalia as a civil war engulfed the entire country. In mid-2005, then-Puntland President Mohamud Muse Hersi (Adde) signed a Contract of Work with Australia-based Range Resources, Ltd., giving the mining firm exclusive rights to explore for oil and minerals in all regions of Puntland. The new President of Puntland, H.E. Abdirahman Mohamed Mohamud (Farole), publicly stated after winning the Jan. 2009 election that the new administration recognizes the exploration contract in principle, but has noted that the agreement is currently under review. In the First 100 Days in Office, the Ministry of Minerals and Petroleum has been downgraded from Ministry-level to an agency under the Puntland Presidency as the New Administration sought to focus efforts on matters of urgency, such as security and public finance management. The new Minerals and Petroleum Director inherited an office staff that had not been paid in the prior months, overdue office rent and lack of transport facilities. The New Administration has called on Africa Oil Corp., a Canadian explorer that is the joint-venture partner of Range Resources, to present documents collected from exploration sites at Dharoor Block. So far, however, Africa Oil Corp. has not handed over any documents to the New Administration, including seismic survey records from the block. The New Administration will call on a panel of experts to review the oil contracts and to ensure that the contract is on par with international standards. The Puntland Government’s policy on natural resources found on land or at sea is that the states have rights of ownership in a federal arrangement that guarantees fair-sharing with the Federal Government in order to benefit the local community and all Somali citizens.
RRS Price at posting:
2.9¢ Sentiment: None Disclosure: Not Held
