Zooming into the Past

Introduction

The many theatrical mineral exploration developments that took place during the 1980s did not deter the Puntland administration from committing itself to arrange agreements with foreign firms. The exploration plans of just one Australian mining company, Range Resources Ltd, have overwhelmingly dominated the activities of Puntland administration, led by Mohamud Muse Hersi. From the outset, these activities do resemble of the numerous contractual arrangements that have been made by a couple of foreign investors during the 1980s.

However, Puntland exploration attempts differ radically from that of former Somali Democratic Republic’s (SDR) arrangements in terms of negotiation skills. Puntland is experiencing shortages of technical assistances from other oil and gas producing countries/and international organizations since it is not an independent/and recognized entity. This fact has resulted in negotiation skills deficiency. Negotiation skills which are crucial component in the bargaining table could only have guaranteed concession agreements favourable to Puntland.

As many scholars wrote, almost all “concession agreements” are kept in the files of the host governments’ advisors. In the case of Puntland, President Mohamud Muse Hersi’s former advisor, Sam Jonah, is currently serving as the non-executive chairman of Range board. Moreover, you rarely see, as scholars observed, any concession agreements that are published.

It is also noteworthy to mention that Roobdoon Forum is uninformed or not knowledgeable of any Investment Policy that protects the sovereignty and control of Puntland territories, in case of concession agreement disputes between the host and investor. However, the Forum is aware of the existence of SDR Foreign Investment Law that provides this clause: “property of the enterprises registered in Somalia is free from expropriation measures except in the case of public interest.” Finally, to reflect the current developments in Puntland, the Forum posts excerpts of news-coverage on the issue of concession agreements between former SDR and foreign explorers. These agreements have taken the center stage of the 1980s Somali politics.

CHEVRON INTERNATIONAL SIGNS OIL EXPLORATION AGREEMENT WITH SOMALIA

31 January 1986

CHEVRON INTERNATIONAL SIGNS CONCESSION AGREEMENT WITH SOMALIA

SAN FRANCISCO, Jan. 31 /PRNewswire/ -- Chevron International Ltd., a wholly owned subsidiary of Chevron Corp., today announced the signing of a concession agreement with the government of the Somali Democratic Republic. The oil exploration agreement covers a three-block area in the Guban area of northern Somalia.

The concession blocks lie along the northwest coast of Somalia, both onshore and offshore extending into the Gulf of Aden. The concession encompasses approximately 40,509 sq. km., or 10,009,744 acres.

Geophysical surveys will be undertaken during the first two years of the concession term, with exploratory drilling to follow.

OIL EXPLORATION AGREEMENT WITH CONOCO

8 July 1986

An oil exploration agreement was signed today between the SDR and Conoco Inc of the USA. The agreement stipulates that 98,700 sq.km. in Nogal, Sool and Togdher regions of Somalia will be subject to exploration.

The Somali Minister for Mineral and Water Resources, Jaalle Ahmad Mahmud Farah, who is also a member of the political committee of the SRSP (Somali Revolutionary Socialist Party) Central Committee, signed on behalf of Somalia and Mr (?Raymond), the company's representative, who will be based in Somalia signed on behalf of his company. The Minister and the representative also discussed how the exploration will be carried out. Present during the occasion were the Deputy Minister of Mineral and Water Resources, Eng Mahmud Shaykh Mursal, and the Permanent Secretary in that Ministry, Jaalle Muhammad Umar (?Asad). (Mogadishu in Somali 1115 gmt 17 Jun 86)

AMOCO SOMALIA PETROLEUM CO. SIGNS AGREEMENT WITH THE GOVERNMENT OF SOMALI DEMOCRATIC REPUBLIC FOR ONSHORE PETROLEUM EXPLORATION.

5 May 1987

MOGADISHU, Somalia, May 5 /PRNewswire/ -- Amoco Somalia Petroleum Company has signed a concession agreement with the government of the Somali Democratic Republic for onshore petroleum exploration covering 35,091 square kilometers (8.67 million acres).

The acreage is in Blocks 6, 9, and 12, north and southwest of Mogadishu. Block 6 has 12,347 square kilometers (3.05 million acres), block 9 has 9,515 square kilometers (2.35 million acres), and block 12 has 13,229 square kilometers (3.27 million acres).

The concession agreement includes an initial three-year exploration period with rights of extension for three additional one-year periods, upon satisfaction of certain minimum work and estimated expenditure obligations. The concession agreement provides for aeromagnetic, gravity, seismic and drilling activities. Operations will begin within the next three months.

The minister for mineral and water resources, Ahmed Mohamoud Farah, signed the agreement for the government. Charles H. Moerbe, vice president of Amoco Somalia, signed for Amoco.

Amoco Somalia is a subsidiary of Amoco Production Company, the worldwide exploration and production subsidiary of Amoco Corporation.

DUPONT UNIT EXPANDS OIL EXPLORATION IN SOMALIA

19 October 1988

NEW YORK, Oct 18, Reuter - Dupont unit Conoco Inc said it signed a 20 million dollar deal with the Somali government to expand its oil exploration activities in northeastern Somalia.

A spokesman for the company said the agreement, signed October 16, committed Conoco to invest at least 20 million dollars in blocks 33 and 34 in the Northeastern section of Somalia.

According to a report on state-run Radio Mogadishu on Monday, Conoco is committed to exploration in the Bari, Sool and Nugal regions of northeastern Somalia over the next three years.

The broadcast, which was monitored by the British Broadcasting Corporation, BBC, said the agreement was signed in Mogadishu on Sunday and exploration work would begin in three months.

The spokesman for Conoco said the company's exploration plans were in the initial phases of development. Conoco has been prospecting for oil in northern Somalia since 1986.

Another U.S. company, Amoco Corp, and the Italian firm Agip SpA are also exploring for oil in the region.

PARKER LANDS MAJOR CONTRACT IN SOMALIA

6 September 1989

TULSA, Okla., Sept. 6 /PRNewswire/ -- Parker Drilling Co. (NYSE: PKD) today announced a subsidiary has been awarded a major drilling contract in Somalia.

Conoco Somalia Ltd. has awarded Parker Drilling Co. Eastern Hemisphere Ltd., a long-term contract to drill exploratory wells in the remote Las Anod desert region of the East African nation. As a result of the contract, Parker has re-opened a division office in the capital city of Mogadishu.

"Parker is grateful to again be returning to this important country," said Robert L. Parker Jr., president and chief operating officer. "We are especially pleased to renew our good relationships with the various Somali officials," he added.

Parker's versatile TBA 2000 Rig 195 is being mobilized for the contract. The rig, presently idle in the Sudan, is being trucked to Port Sudan. From there, it will proceed by barge to the northern Somalia port city of Bosaso and then transferred to trucks for the 430-mile, cross-desert trip to Conoco's initial location. From the Kenya port of Mombasa, other Parker camp facilities and equipment are being barged to Bosaso as well.

Wayne Hazelwood, a Parker employee who last worked in Somalia in 1986, has been named operations manager for the project. Spudding is expected to take place Nov. 15.

Parker is a worldwide oil and gas drilling contractor with operations in 15 countries.

International PHILLIPS Signs Exploration Pact with Somalia For

3.5-MILLION ACRES

29 November 1989

Oklahoma City 11/28 -- Phillips Petroleum International Corp. Somalia has signed a concession agreement with the Somali Democratic Republic to explore for oil and gas on a 3.5-million acre onshore block, the company announced today.

Under the terms of the agreement Phillips is granted an initial exploration period of two years. After that time, it has the option to extend the concession for additional periods of one year each. Phillips plans to begin seismic work during the first quarter of 1990. No further details were given.

Phillips holds 100% interest on the acreage. The company now has interests in about 9.6-million acres in Somalia. It's currently working on a wildcat well in Somalia, in association with Conoco. The well is on a separate block. Currently there is no oil or gas production in the country. About 50 wells have been drilled there, a Phillips spokesman said.

MOBIL, SHELL SET SOMALIA EXPLORATION

30 August 1990

FAIRFAX, Va., Aug 30, Reuter - Mobil Corp said its Mobil Exploration Somalia Inc affiliate signed a joint venture agreement with Pecten Somalia Co, a Shell Oil Co subsidiary, to explore a block in the Indian Ocean offshore Somali.

The concession area was awarded to Pecten in 1988. As operator, it has already conducted extensive seismic evaluation of the 14.9 million acre block. Pecten's parent is a subsidiary of the Royal Dutch/Shell Group.

Mobil said it and Pecten will equally share the exploration risk and any resulting production. They expect to drill the first wildcat well early next year.