Somali President Abdillahi Yusuf

By Yusuf Ali

Mogadishu, Somalia, 30 April 2008 - The president of Somalia's Transitional Federal Government (TFG) has signed a letter formally approving an oil exploration project in the northern region of Puntland that has been mired in controversy and bloodshed since early 2006, Garowe Online has learned.

The letter, dated April 25th, was signed by interim President Abdullahi Yusuf, himself a former Puntland warlord before being elected to the Somali presidency in October 2004 at the conclusion of a two-year peace process in neighboring Kenya.

"This letter serves as an official endorsement by the TFG of the legitimacy of the existing agreements with the concession holders in Puntland," the letter stated.

Although the letter did not elaborate, the "concession holders" refers to Australia-based mining firm Range Resources, Ltd., and Canada's Africa Oil Corp., two companies who have a joint venture to explore for oil and gas in the semiautonomous State of Puntland, northeastern Somalia.

This is the first time the President of Somalia has officially recognized the "legitimacy" of the Puntland-Range-Africa Oil agreement that was originally nurtured under suspicious circumstances and sparked bloodshed in one of Somalia's most peaceful regions.

In August 2005, Puntland President Mohamud "Adde" Muse flew to Dubai and met with Range representatives, who presented a contract of work, which the Puntland leader eagerly signed with utter disregard for the region's constitution and the establishment of the new federal government (TFG).

Attempts by Range to send geologists to the region of Sanaag, which is at the heart of a violent land dispute between Puntland and the breakaway republic of Somaliland, sparked civil unrest in an erstwhile peaceful mountainous village, with local villagers taking up arms against Puntland security forces protecting the Range geologists.

Local sources reported - and Garowe Online documented - the death of at least 10 people including soldiers and villagers during three separate acts of violence in the village of Majihaan, Sanaag.

Due to this, Puntland and Range indefinitely suspended their operations in Sanaag after it become increasingly clear to all parties that the local Warsangeli clan violently opposed any encroachment upon their territory without clan approval.

In 2007, Range announced that it had signed a farm-in deal with Africa Oil (formerly Canmex Minerals), giving the latter an 80% stake in the Puntland exploration project.

Puntland officials and their foreign partners, namely Range Resources, spent the past two years attempting to collect mineral samples on the ground, with little success, while working diligently to gain President Yusuf's approval.

That the Somali leader has finally signed on to the Puntland-Range-Africa Oil controversy was presented as good news by the aforementioned companies and their supporters in the Puntland government.

On April 29, Range issued a statement announcing a delay in the Africa Oil drilling program, which was scheduled to begin in July. The company cited "civil unrest in southern Somalia and piracy around Somalia's coast" as creating "logistical difficulties" to the shipping of heavy drilling equipment to Puntland.

But the company claimed that President Yusuf gave the exploration project "a broad endorsement," apparently referring to the Somali president's April 25th letter, which was mysteriously published only in the English language.

Government insiders have told Garowe Online that President Yusuf's endorsement directly contradicts the position of other TFG officials, including parliament Speaker Sheikh Adan "Madobe" Mohamed and Somali Energy Minister Mohamud Ali Salah.
In March, Energy Minister Salah issued a press statement condemning the Puntland oil law, which the Muse administration in Puntland claimed was ratified by the regional parliament.

But many Puntland lawmakers, who represent local armed clans, remain strongly opposed to the oil law and have demanded a second vote after accusing Puntland Parliament Speaker Ahmed Ali Hashi using an ill-timed and "illegal" vote to break a 21-21 tie on the Puntland oil law.

Adan Madobe, the TFG Parliament Speaker, has backed a legislative process at the federal level to enact a national oil law for Somalia, which would automatically disqualify Puntland's oil law and terminate its controversial agreements with foreign companies.

According to Speaker Madobe, the TFG Parliament is in the process of completing the national oil law and debate is soon expected on the parliament floor.

Many observers have wondered how it is possible to explore for oil in Somalia, where a civil war has raged for 18 years, worsened only by Ethiopian occupation troops protecting Yusuf's government in war-torn Mogadishu.

It is not clear why Yusuf, who enjoys little support from Mogadishu's armed clans, would now endorse the exploration effort in Puntland, where he has historically enjoyed local clan support.

Muse, the Puntland leader, has angered many local clans during his tenure and is blamed for a range of social, economic and security-related problems that have devastated the region since late 2005.

Source: Garowe Online