By Mahdi Haile opednews.com
There has been a recent influx of oil companies to Somalia, but the country has been offered only a 7% share of the proceeds from the exploitation of its oil.
This problem was foreshadowed by the former Somali President Mohamed Siad Bare, who famously said: "I will never sell my oil for 5%, or even for 10%, as long as Somalia is not getting the best deal."
Do you know why oil companies left Somalia? And why they are now scrambling back? It is clear to many people that the corruption of which the West often accuses third-world leaders creates the very environment it needs for the control of third-world resources and for colonialism to thrive.
In reading Katrina Manson's article "Oil Thrown on the Fire" at the Financial Times website, I saw again that, with every passing year, Somalis are losing more and more control of their own country to international criminals all over Africa and Europe. Kenya and Norway are the latest entrants in the scramble for Somalia's resources.
The Hoped-For Economic Bonanza Could Become a Curse
The looting of Somali resources has begun in earnest, this time not on its coast for fish, but on its land, also located in the East African region.
Since Somalia has remained one of Africa's poorest countries for decades, many Somalis heaved a deep sigh of relief when the government recently announced that the country is now peaceful and open for business. In my opinion, however, oil companies are not now "discovering" oil anywhere in East Africa, but simply exploiting the oil belt that runs along the entire coast of the southern and northern regions that has been known about for decades. In earlier years, oil executives didn't care about building rigs in Somalia and thereby contributing to peace in the country. They were too busy trying to gain control over the unstable conditions in the Middle East.
Today, the Somali people should not be deceived about the prospect of dramatic benefits from new oil wells. Yesterday, there was illegal fishing on our coast, and, now, the oil scavengers and neighboring countries and their governments, respectively, are again looming over it. If we are not careful to regulate and choose rightly between the Sudanese, Nigerian, and Ghanaian models of exploitation, there will be no real benefit from all the new oil drilling. In the long run, this apparent economic bonanza could definitely turn out to be a curse for the Somali people.
It is understandable that, given the current political stability and recent oil finds, Somalis all over the world, like many other native Africans, are gripped by the expectation that oil and gas exploration "will bring" prosperity to their country. It is undoubtedly true that, if the opportunities that accompany exploitation of the "black gold" are well managed, they could transform Somalia for generations to come. This prospect of a major upgrade in living conditions from 2016 on has raised the hopes and aspirations of many in the country.
Unfortunately, these aspirations may turn out to be a nightmare, if the government allows every region in the country to independently sign a contract with oil corporations and their governments. Things can also go bad if the people and Parliament do not rise up and demand that the Somali government take some time to adequately scrutinize any oil "agreement" it reaches. The government should also set up a national platform for a dialog on the best way forward. This must be aimed at securing a reasonable percentage share (70% and above) of oil proceeds for the people, whose interest the government claims to serve.
According to a recent statement issued by the UK Ambassador Matt Baugh, the chances of reaching agreement remain "very, very fragile." Rival regional administrations have issued several companies rights to a clutch of overlapping oil blocks, redrawing the political map of Somalia in line with their own interests. On an international level, disagreement between Kenya and Somalia over their maritime boundary has also created what one diplomat terms a "triangle of confusion" that reaches across 120,000 square kilometers. Kenyan troops defend the port of Kismayo, south of Mogadishu. This posture is notionally in support of the Mogadishu government, but Somali officials worry Kenya is actually keener on securing oil rights.
Oil exploration commences with high hopes for economic transformation. So, why the rush to explore for oil without first putting adequate measures in place that can meet the challenges that may accompany oil exploration in the near future? Are there other reasons for rushing forward? Are President Hassan Shiikh Mohamud and regional governors considering early retirement in the coming months? Has the government considered buying or building local refineries to process the crude oil, or will Somalia follow the Nigerian model, by which raw crude is shipped to Europe and the refined product shipped back to Nigeria at ridiculous prices? Has the government considered training local engineers to take over the management of the oil industry within the shortest possible time? Why must Somali leaders always allow sensitive sectors of their economy to be held hostage by a few foreign corporations?
Leaders with Adequate Planning Skills Are Essential
Our major problem as Somalis is that we lack leaders with adequate planning skills. Before we rush to commission most projects, we do not adequately take the time to plan against the unforeseeable challenges that are likely to show up in the near future.
Is Somalia well-prepared to deal with corruption in its oil and gas agency? Is the government prepared to face the angry youth who are likely to take up arms, as we've seen in other countries? In Africa, especially in Nigeria, many agitated so-called rebel groups have taken up arms to fight what they call "corruption in the oil and gas sector." This situation has now gone out of control. Will Somalia learn some lessons from other countries, or will the leadership, as usual, wait unprepared for problems to emerge before it runs back to its NATO saviors for solutions?
Although President Hassan Shiik Mohamud has not said what will happen with respect to the Somali share of oil proceeds, he stated that any contracts signed with Puntland since 1991 are now "null and void" and that ConocoPhillips wrote in 2007 that it had "not relinquished its rights in Somalia." But Puntland's government countered in February that the Mogadishu government was interfering "illegitimately on resource exploitation."
Angered by this shocking news, Abdi Ahmed Xito, a PhD student, wondered: "When Somalia was in crisis, did the corporations and these governments send any help? I'm shocked at how a country's wealth is being giving away for peanuts. Is this the reason why the president was named as one of the 100 most influential people in the world, along with Barack Obama, some months ago? President Hassan may become the corporations' and World Bank's darling man anyway. You don't get [to be among] the most influential without signing deals."
This has always been my point. The man is absolutely right! Of course, that is the price the people pay when our leaders are lifted to such lofty heights.
I guess we now have a clue as to why our leaders will always sign unacceptable agreements. Their selfishness is the reason for our underdevelopment. The people themselves must rise up and say no to all those foreign-funded corporations and NGOs that have been buying-off our leaders and our independence by giving them so-called "prestige" and awards. It's a shame. There is no nationalism, no patriotism, of any kind. How can a country that has suffered over a decade of economic hardship settle for something like a 10% "royalty" on a multi-billion-dollar resource like oil?
Meanwhile, at the moment, although early indications are positive, the exact extent of oil deposits found in the country still remains unknown. Regional leaders have already settled for peanuts from the big oil corporations, handing over the oil reserves to Western firms with virtually nothing left in the near future for ordinary Somalis. This brings to mind my biggest concern: Why are such sensitive agreements always made in the corridors of secrecy, when the destiny of entire generations depends on them? Why must the good people of Somalia be satisfied to allow a few selfish, greedy and corrupt politicians to negotiate on their behalf in camera, and then never adequately convey to them the details of the agreements they reach?
Especially in a country like Somalia, which has been plunged in civil war and suffered decades of economic hardship, wouldn't it have been better to put momentous oil agreements in the public domain, where they could be discussed openly in consultation with leaders of the regional block?
But, in this case as in others, Somali leaders have held to the practice of never consulting their colleagues on critical issues. A few millions poured into their offshore accounts, and the agreement is sealed, leaving the masses of the poor to their fate.
Will Somalia Repeat Other Countries' Mistakes?
Today, in Nigeria, western oil companies loot some $140 billion a year of the country's oil, while two-thirds of the country's 160 million people live on less than $2 a day. Western oil companies are literally looting Nigeria's oil, paying as little as a 9% royalty. Simply put, at $100 a barrel the western oil companies get $91 and Nigeria only gets $9. Or more shockingly, Big Oil makes $140 billion a year vs. Nigeria's $10 Billion. These figures, Thomas C. Mountain writes, reveal the shocking reasons why many Nigerians remain the poorest people in Africa, despite their country's abundance of oil and gas.
Profile of Mr. Mahdi Haile. Mahdi Haile was Born In Somalia and now lives in United States. He is an educated scholar and intellectual. he is an independent expert on Horn of Africa, a Somali blogger, he is Activist and human rights campaigner. As a (more...)