Beijng to Roll Out the Red Carpet for Somaliland President
CNOOC is trying to win oil concessions directly from Somaliland after initially negotiating with Somalia’s central government, which has no say in Somaliland.
Somaliland president Ahmed Mohamed Silanyo is due to fly to China early in the new year in the wake of a visit to the Somaliland last April by a Chinese delegation that included two officials from the China National Offshore Oil Corp. (CNOOC).
The Chinese company wants to pick up acreage in Somaliland where Conoco identified oil and gas reserves in the 1980s. CNOOC made an initial attempt to debut in the province in 2006 by negotiating a production sharing contract covering the Mudug area in Somaliland with the Transitional Federal Government (TFG) in Mogadishu.
However, the agreement remained a dead letter because Somaliland doesn’t recognize TFG’s authority.
As a result, CNOOC switched its strategy early this year in favor of making direct contact with authorities in the province. If the company is awarded concessions it will find itself operating in both a legal minefield and an insecure environment. American companies active in the country until the late 1980s still believe themselves to be owners of their concessions and consider the acreage has simply been placed under force majeure (No. 562).
In addition, the Somaliland government has no geological data on its subsoil. The results of drilling campaigns in the 1980s have been retained since the early 2000s by a small British concern, Fugro-Robertson, which has refused to turn them over to the Somaliland government.
To make up for that lack of information, Somaliland retained TGS-Nopec in 2009 to acquire 5,300 km of seismic and magnetic data as well as 34,700 km of aeromagnetic data.