Copyright (c) 1993 , EMA Business Information.
Reprinted by permission.
Middle East Economic Digest, 2 April 1993, pp.20-21.
Somaliland: Hopes and hype on the new frontier
Geologists have speculating about the possibility of oil in Somalia since the last century, but it took the US military Operation Restore Hope to bring this possibility to popular attention. The widespread notion that US troops are sent to Somalia to protect the interests of US oil companies, and their supposed huge oil finds, has been treated with amused derision in oil industry circles. But US military presence which aims to stabilise events in a region increasingly regarded as the backyard of its regional ally, Saudi Arabia, has not been discounted . Over the past l0 years most of the oil industry interest has focused on areas in the north, today the self-declared Republic of Somaliland, which troops have avoided. Any future oil exploration here will depend largely on the international community's recognition of the aspirations of the breakaway state.
Oil seeps were first identified by Italian and British geologists who surveyed the area during the colonial era. These predicted the presence of a sizable oil field just south of Berbera. But it took until the 1960s for the first wells to be drilled here. Three wells known as the Daga Shabell series, regisrered oil shows, but there was no real discovery . There were further small gas discoveries along the east coast and just offshore of Socotra, but nothing of commercial proportions.