Oil on troubled waters?

By Hanna Ucko, Global Conflicts Analyst; Coordinator, Armed Conflict Database

Strange news from Somalia, where they are drilling for oil. Some optimists believe that the conflict-ridden nation could be sitting on 3bn-4bn barrels, and Somali politicians say they hope that this can bring greater stability and development. But that may be a tall order for a country with no functioning central government for 20 years.

At least 362,000 people have died during this period, and the weak Transitional Federal Government (TFG) and its African Union peacekeeping allies remain embroiled in an all-out conflict with the Islamist group al-Shabaab. Ethiopia – again – and Kenya – for the first time – have both also recently sent troops into Somalia. Decades of such fighting has greatly damaged the country’s infrastructure as well as its stability.

Nevertheless, Horn Petroleum, a subsidiary of Canadian-owned Africa Oil, has begun drilling in the Dharoor and Nugaal valleys in the semi-autonomous province of Puntland, whose government negotiated the deal. There are tensions between the two semi-autonomous provinces of Puntland and Somaliland, as well as with the rest of Somalia. Any discovery of oil could exacerbate these, as the various clans, traditional authorities, local, provincial and national governments scramble to access the potential revenue.

Somalia’s Prime Minister Abdiweli Mohammed Ali has already warned companies against making deals with the semi-autonomous governments, although Puntland’s president has offeredto distribute oil wealth to benefit all Somalis once a constitutional settlement with the TFG is reached. (A Somali Federal Constitution is due to be adopted by April 2012).

Even if these tensions are resolved, oil production and distribution may still be threatened by local opposition and attacks by criminal groups and pirates. An attack by gunmen on a convoy carrying Africa Oil executives and Puntland officials last July was reportedly motivated by local anger at foreign exploitation of the region’s resources. Sabotage by groups opposed to the foreign exploitation of oil has been a serious long-term problem in Nigeria, Africa’s largest oil producer. A similar scenario could be easily imagined in Somalia where law enforcement is weak.

Transport of extracted oil could also be threatened by rampant piracy in the waters off Somalia, which the International Maritime Bureau calls the most dangerous in the world. Many pirates are based in Puntland, too. Any oil discovery may only increase piracy and strengthen the non-state armed groups behind it. This could have wider repercussions, as one-third of Europe’s oil supplies travel through the Gulf of Aden.

The famine across East Africa has elicited much international attention recently, and UK Prime Minister David Cameron has announced a conference on Somalia in a few weeks, just about the same time as more oil exploration – this time in Somaliland– is due to start.

The head of Puntland’s Petroleum and Minerals Agency, discussing the oil exploration in his region recently said: ‘Before any barrel of oil comes out we will have a policy that will benefit our own people and will not be detrimental to us.’ But in Somalia good intentions like this may be difficult to see through.

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