Geopolitik Energi

April 25, 2007

SOMALILAND: HOPES AND HYPE ON THE FRONTIER

Interest in this part of Somalia resumed in the mid-1970s to early 1980s when high oil prices gave oil companies a lot of cash to spend on exploration. A huge concession over northern Somalia, known as the Duban conscession , was awarded in 1980 to a consortium comprising two privately owned US oil companies , the Dallas-based Hunt Oil Company and the Houston-based Quintana Oil Company. These tried unsuccessfully for two years to interest other industry partners to explore the region but eventually were obliged to relinquish the concession. Hunt continued exploring in Yemen and discovered the Alif field while Quintana, which is owned by the Cullen banking family, cut down all its international exploration and concentrated on operating the south Texas Tom O'Connor oil field which produces its principal cash flow.

The discovery of oil in Yemen inspired furthel industry interest in Somalia. There are geological similarities between south Yemen and north Somalia, but geologists warn that the analogy cannot be taken too far. Since south Arabia and the of Horn of Africa were once geologically connected, certain structural trends are traceable from one side of the Gulf of Aden to the other. There is no evidence yet to support speculation that a mirror image of Yemen's Alif fields will be found in Somalia, but this cannot be discounted either. However an idea which has spread among some Somali officials that their country holds oil fields similar to those in Saudi Arabia is nonsensical.

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