CAPE TOWN, Nov 1 (Reuters) - Wanted: investors for small
African nation with good oil and mineral potential - no seat at
the United Nations but history of independence in rough
neighborhood.
The break-away nation of Somaliland is a tough sell but the
announcement this week that serious hydrocarbon exploration is
about to kick off there shows that oil talks, regardless of
political status.
For Somaliland, an internationally unrecognised state of 3.5
million people that declared independence from Somalia in 1991,
it promises to be a game changer.
"We need to find a way to earn hard currency besides selling
goats, sheep and camels to Arabs. This is the only way we earn
hard currency now," Hussein Abdi Dualeh, the minister of energy
and mining, told Reuters on the sidelines of an African oil
conference in South Africa organised by Global Pacific &
Partners.
Ophir Energy Plc, Australia-based Jacka Resources
and Genel Energy, which is headed by former BP
chief executive Tony Hayward, are all about to start
exploration in Somaliland.
Dualeh said the investments would be worth tens of millions
of dollars, small change in the global oil industry but a
windfall to a government that only has a budget of $120 million.
Gas discoveries off Mozambique and Tanzania and oil finds in
Uganda and Kenya have sparked a hydrocarbon scramble into
previously unexplored parts of Africa.
Oil companies often go where other investors fear to tread,
including other unrecognized statelets such as Kurdistan.
"Oil companies are concerned about geology, not politics,"
Dualeh said.
He also said Somaliland offered investors something sorely
lacking in anarchic Somalia: stability.
"We control our borders, we have a police force and
military. We have had four governments come and go with
democratic elections," he said.
The territory has not exactly been an oasis of peace,
however. Fighting erupted there in January after the leaders of
the northern regions of Sool, Sanaag and Cayn decided to band
together into a new state called Khaatumo.
Somaliland's troops have since clashed with militia fighters
loyal to Khaatumo, with reports of dozens of casualties.
And what about pirates?
"The pirate problem is not off our coast, it starts in the
Indian Ocean with Somalia. We have a nimble coast guard that
does its job with limited resources," Dualeh said.
If oil is discovered, Somaliland would also welcome the
steady stream of revenue that would follow.
Dualeh said livestock sales across the Red Sea to Saudi
Arabia followed a seasonal pattern with sales peaking during the
annual haj pilgrimage.
"We need to get stuff out of the ground. Selling livestock
during the haj is not sustainable," he said.