In the summer of 1959 while spending the school holidays in Berbera with my relatives, I heard that oil was discovered in a place called Dagah Shabel in the Guban coastal plain to the south of the town. The air was redolent with hope and a better future for Somaliland. It was said that some oil had already been pumped out, that the place was dubbed Xidhka Saliidda (the dell of oil) and that it was only a matter of time before our country became an oil exporter. As we all know, political events in our country moved very fast indeed culminating in our winning independence and uniting with Somalia the following summer. For reasons unknown to most of us, oil exploration in the Guban as well as that part of southeastern Sanag called Xadeedka (Where exploration started in 1957) came to an end at (or about the time of) independence. In fact oil companies ceased their activities in the country as a whole (including the southern part of the former Somali Republic where at least one American oil company was active) and did not come back until the oil crisis in 1973/74. Even then oil exploration was not resumed in Somaliland. Thus, I did not hear of Dagah Shabel until January this year while reading an open letter to President Rayaale written by two Somaliland geologists and published in the website somalilandtody.net warning him about a company he had granted a concession to explore for oil in the neighbourhood of the area. In other words the mention of the place name Dagah Shabel is being repeated as far as I am concerned after 47 years.
It is now pertinent to ask, “What happened to the oil bonanza that was expected almost 50 years ago? Is there no oil in the country or have we messed up our chances of finding it. First of all, let me deal with whether or not there is oil in Somaliland. From the outset I must say I am not a geologist. However, what I am about to write does not require professional expertise but some knowledge of the facts regarding the geology of the terrain where oil is found, what has been written about the existence of such terrain in our country and what is required in productive wells with respect to their commercial utilisation.
The information I have been able to glean indicates that the primary geological structure that petroleum engineers look for is a thick sequence of sedimentary rocks deposited over land that has been submerged under the sea and then gradually rose to become dry land again. This flow and ebb of the sea over the land took place over millions of years such that the advancing sea deposited a layer of sandstone while the skeletal material of the marine life resulted in the deposition of limestone and the retreating sea formed another layer of sandstone. It is believed that this part of the Horn of Africa inhabited by the Somali people has been invaded by the sea several times through its geological history such that the thick sequence of sedimentary rocks looked for by geologists does exist. A second indication of the existence of oil in a region is the presence of oil seeps. This is the physical seepage of oil to the surface of the land to the extent that it appears on the topsoil. However, the oil appearing on the surface of an area may have seeped from another area hundreds of miles away so that geologists will have to determine the original source of the seepage through satellite technology or seismic methods. Somaliland and other areas of the former Somali Republic do have both of the above indicators of oil-bearing rocks. In fact Chevron, while exploring for oil in Somaliland during the 1980’s, called our country “the land of bards and oil seeps”.
In addition to the geological indicators, there is another factor considered by oil companies in their search for and investment in oil wells. This is the commercial viability of the wells i.e. the extent to which the expected financial benefits exceed the costs of producing oil from a given well. If the costs exceed the revenue or if the amount by which the revenue exceeds the costs is marginal, then there is no point in producing oil from that well.
I believe that in the former Somali Republic matters had never reached that stage. Exploration was either discontinued by oil companies due to British and American disenchantment with Somali government policies, harassment by Somali officials or it was interrupted by war as in the late 1980’s.
What were the specific reasons that caused oil exploration in the country to be ignored for a long time during the 1960’s and early 1970’s? What happened to oil exploration after western oil companies resumed interest in the matter in the mid-1970’s and why are western oil companies not interested in revitalising their former concessions or seeking new ones in Somaliland where there is stability and peace in most parts of the country. This is odd particularly in view of the recent sky-rocketing of oil prices.
To answer the first question we must remember that it was British and American oil companies that were exploring for oil in the country. As far as I can guess, the British were very angry with the political leaders of Somaliland over the way they handed over the independence the country had won to the political elite of Somalia without any conditions. The reason for their assumed anger was not because they loved Somalilanders so much but because they wanted to have some influence in post-independence economic co-operation with the emerging Somali Republic and they could not do that if the political leaders of Somaliland had no clout in the new country.
Both written and oral history dating back to that period indicates that the British tried to prevail upon these politicians either to delay the hasty union or to negotiate strongly with the southern politicians over the terms of the proposed union. When the latter failed to do either, the British lost interest in post-colonial economic investment in the Somali Republic and probably discouraged their companies from doing so. This stance was possibly also co-ordinated with the Americans. On the other hand, Italy enjoyed thriving economic relations with the new republic. Moreover, the N.F.D. question, if handled in a diplomatically skilful manner, could have brought the two countries closer. In the end it only served to pull them apart causing a rupture in diplomatic relations. In short, the British dangled the N.F.D before us so that we could offer them something in return e.g. concessions for petroleum exploration in the country. But our political leaders failed to understand the diplomatic overture.
As for the period after the 1973 oil crisis when the American oil companies returned to the country, the country was run under a soviet-style system of foreigner surveillance and constant requirement of prior approval for travel outside Mogadishu by oil company executives and employees such that the foreign oil men were soon fed up and left the country. For example, in 1975 the French oil company ELF invited its employees to a party to celebrate its success in finding oil in its concession offshore from Hafun. But they were soon expelled from the country or harassed to leave it. Many other oil companies were met with the same fate. They did not come back until the 1980’s after the expulsion of the Soviets and the adoption of free enterprise.
The 1980’s, however, was not an era of freedom from bureaucratic hassles and limitations of movement. Working with the regime was just as frustrating as ever. In 1984, an American businessman whom I met casually in Mogadishu told me that his company was involved in installing natural gas liquefaction and piping from Afgoi for export. The man was extremely enthusiastic about the project and looked forward to its successful completion. But as we all know no gas was ever exported from Afgoi. I can’t tell you what exactly happened, but I can guess: harassment and meddling by top government officials and political leaders. But the final straw that broke the oil companies’ back was the insurgency that was raging in the North i.e. Somaliland.
Let us now try to understand why the western oil companies and their countries of origin have not shown any interest in oil exploration in any part of the former Somali Republic after the fall of Siad Barre. First of all, this is not quite true. For, in fact the Mogadishu correspondent of the Los Angeles Times sent a dispatch from there shortly after the arrival of the American troops indicating that the U.S. interest in Somalia was not purely humanitarian as declared by Bush; that he was an oil man after all; that oil companies such as Conoco had urged him to secure the country for American interest and that Conoco’s office and storage depot had remained open in the first two years of factional conflict in the country. From this it can be concluded that the U.S. lost interest in Somalia only after its mediation effort had failed and its troops had become involved in the dangerous conflict instead of acting as peacemakers.
What about Somaliland? Why have the Americans and their British allies not shown any interest in the country’s oil potential especially after the establishment of peace and stability in most parts of the country. Many people may say that it would be imprudent for a large multinational company to invest in an unrecognised country. However, the whole idea of oil exploration and the question of recognition could be tied together. We know that western companies have a lot of influence over their governments. So, the government of Somaliland should have approached those companies that had concessions there like Chevron and Conoco and told them to lobby their governments for recognition if that was the major obstacle to their returning to the country. If they showed any reluctance in this matter, the government would have warned them that it would look elsewhere. And then we could have approached the British, the Chinese and whoever else was interested. The governments of the home countries of these oil companies could also have been approached to convince them of our mutual interest in this matter.
However, the successive governments of Somaliland either ignored the matter altogether or began to sign oil exploration agreements with fraudulent companies who have absolutely no experience in this matter. Rayaale’s government belongs to the latter category.
In December last year two highly-qualified geologists from Somaliland wrote an open letter to Rayaale warning him about a deal his government had concluded in April 2003 with a company called Rova Energy Corporation (REC) which in their view is fraudulent. They also advised him to seek out reputable oil companies that have distinguished themselves in the field and to shun novices and crooks. Instead of heeding that advice, it was reported in Somaliland Times and the electronic press a few days ago that Rayaale, the Minister of Water and Mineral Resources and the Minister of Planning had concluded an oil exploration agreement with an Indian national called Mr Sood in February this year. Since when have the Indians acquired expertise in this field? Or are the three honourable men more interested in the signature bonus than the prospect of finding oil in the country?
In addition to the expert geologists’ advice, I would like to suggest to President Rayaale to cancel all existing agreements with these fake oil firms and establish contact with those companies who had concessions in the territory of Somaliland during the term of office of the last recognised Somali government. If they refuse to start work immediately, all their concessions should be given to the British i.e. BP, Shell, etc, while also playing our diplomatic hand skilfully regarding the recognition issue. Should the American/Canadian oil companies wish to resume work immediately, then the British should be given exploration rights offshore and in any remaining onshore petroleum-prone areas. I say this because Britain has been the closest country to us since the struggle against the Siad Barre regime. The British government and people through their NGO’s, politicians, government officials and dilomats have given both moral and material support to our people. It takes a decent man to say thank you and to pay back the good deeds.