Somaliland: Financial and Technical Resources into the Effort to Speed Up the Exploration Activities Acquired


Interview with the Minister of Mining, Energy & Water Resources, Eng Husein Abdi Duale By Adan H Iman

Somalilandsun- On November 6, 2012, a team led by President Silanyo chairs a Genel energy company meetingTony Hayward, former chairman and CEO of the giant British Petroleum corporation, arrived in Hargeisa for talks with Somaliland government officials. Tony now heads the Anglo-Turkish firm, Genel Energy. Genel Energy and Ophir Energy, another oil company who holds an oil license in Somaliland, are expected to start oil exploration in Somaliland early next year.

These companies are expected to spend tens of millions of dollars to explore for oil in the country. For two decades, Somaliland has been trying hard to attract international investment and political recognition without success.

The imminent arrival of those international corporations is a vote of confidence for the country from these companies. Should oil exploration becomes successful, the presence of oil reserves will enable the country to leverage her new found resources towards international political recognition down the road. This is a breakthrough for the Administration of President Ahmed Mohamed Mohamoud Silanyo. The point man in leading the effort to explore and exploit Somaliland’s natural resources is the Minister of Mining, Energy & Water Resources, Hussein Abdi Dualeh. I recently contacted the Minister by phone in order to elicit more information about this important development. Q: Mr. Minister can you please tell us more about those oil companies? A: We have not signed new exploration contracts with new companies. In order bring in additional capacity into the exploration effort, we facilitated and approved the farming in of international oil companies into the existing licenses. This brings in more financial and technical resources into the effort to speed up the exploration activity. Q: Are these companies large and what is their track record? A: With these farm-ins the companies that are operating in Somaliland are viable international oil exploration and production companies that have a good track record of finding oil and producing it and have sizable operations in Africa and the Middle East. Q: You said exploration will start early next year and it is possible we may see drilling for oil by 2014. Tell more about this. A: Oil exploration is a complex capital intensive process that goes through several stages. The first stage involves geological and aerial surveys. This takes several months. This is followed by seismic survey that is done on the ground, which can also take several months. Information gathered is integrated and interpreted to find possible drilling prospects. This process also takes months to complete. If the company’s assessment concludes there are prospective drillable prospects, they then move to the drilling phase. The moment of truth arrives when exploratory wells are drilled. At this stage, it is where one either strikes oil or ends up Genel Delegation meets Energy minister in Hargeisa on Oct 2nd 2012drilling drying holes. There is a difference in finding small quantities of oil or oil shows and the discovery of oil. The former has no commercial use while the discovery of oil means there are enough oil reserves that are sustainable enough for commercial utilization. Even if there is an oil discovery, developing the oil field and building the necessary infrastructure such as tank farms and pipelines will take some time to ship the oil to market. It is important to note that Somaliland has long coastline and the hinterland is close to the sea such that building an infrastructure to ship the oil will not be very expensive. So even if small oil fields are discovered, it can be commercially viable to develop and it can be piped to shore and shipped to international markets in relatively shorter period of time. Q: If oil is found, it will not only be an economic boom for the country but it will have implications in Somaliland’s international relations. A. That might be true. If the oil companies take major financial stakes and investment in Somaliland, they will want to protect their interest and may advocate for the country’s international standing. It is possible that the international legitimacy we have been aspiring may come through leveraging our natural resources. Let us all pray that our exploration efforts are successful and we find oil and mineral resources in Somaliland. There is a lot riding on this for the country. By the way, we have also signed minerals explorations licenses to find commercial reserves of hard minerals such as iron, coal and manganese. We are also hopeful in this area to be able to begin mining some of these minerals in Somaliland in the not too distant future. Q: There are a lot of problem regarding property rights in Somaliland. Do you think this will be addressed by the Administration? A: First we have to appreciate the positive aspects of what our people have achieved. They built a democratic, stable and peaceful country. This is a major achievement. Additionally, we need to respect the rule of law. Property rights and land use is one area where we need to improve on. The Administration of President Ahmed Mohamed Mohamoud Silanyo is very interested to institute a major land reform to manage and develop the land in a sustainable and responsible way. Q: Last year you stated that if oil is discovered, Somaliland will follow the example of countries like Norway, which put their resources to a responsible use for the benefit of their citizens. In some African states the exploitation of oil resources results in political dictatorship, economic stagnation and environmental degradation. Are you confident Somaliland will, in the event of the discovery of hydrocarbons resources, effectively put those resources for the good benefit of her people? A. What I said was, Somaliland will aspire to manage its resources in a sustainable and responsible way and would like to emulate countries such as Norway which have done an excellent job of managing their hydrocarbon resources for the benefit of its people. Countries in Africa which have done a decent job in managing their petroleum resources that we would like to copy from include Ghana. Our goal is to have legal and institutional frameworks in place before the exploitation of any hydrocarbon resources begins in Somaliland. This is to avoid gross mismanagement of these resources if God blessed us with it as has been the case in several African countries. I guess we’ll find out if we have any in the coming few years. Somaliland has now basic institutional infrastructure to build on to insure that any natural resources that are exploited are put to good use for the benefit of the country and its people. We have a constitutional democracy and inclusive political system. We have a President who is elected by the people. We have a vibrant multiparty political system, a legislature that represents the people, civil society groups, civil liberties for the people and free independent media. These structures form a good foundation to establish strong regulatory and institutional framework to manage our resources in a sane and responsible way. Q: Since you yourself made a fateful decision to move back home in order utilize the knowledge and skills you assimilated during your long stay in the United States, what message do you have for the diaspora Somaliland communities all over the world? A: Before I talk about the diaspora, let me say few words about the local people. As we travel around the country now and observe the political campaigns underway to elect municipal councils, one can’t help but be filled with pride about how mature our democracy is and how peaceful the electoral competition between the political parties is. It was the local people who, after the defeat of Siad Barre regime and the collapse of the old oppressive repressive order, established a new independent nation from the bottom up by creating peace and harmony among the people, and building institutions of government and a democratic political system. As for the diaspora, they have an important role to play in supplementing the efforts of the local people. The knowledge and skills they acquired, the financial resources they have and the relationship they formed with the outside world will benefit our people tremendously. For those that are gainfully employed and cannot return just yet, they can invest in their homeland. For those that can retire from their careers abroad, they can return and volunteer their skills and talents and set up a business here. In order to develop, the country will need engineers, doctors, teachers, etc. Wealth is created by people. We have highly educated and skilled Somaliland professionals all over the globe. There was a brain drain when all this talent left the country. We are very hopeful, as our country begins to develop, that some of these skilled professionals will return home and our country will have a brain gain as a result. If you have the opportunity to do, there is nothing more gratifying than making a difference. Q. Mr. Minister, thank you much for sharing this information with the people and best wishes for you and your colleagues in your tireless efforts to move the country forward. A: It is my duty, and a great pleasure, to share information with the citizens of Somaliland Email: