Somaliland is thinking about opening bidding for new oil exploration to foreign companies for the first time since 2009, according to Bloomberg. Commercial exploitation has not started yet, but London’s Genel Energy hopes to find two billion barrels if it secures exploitation rights.
Plans for oil extraction might be complicated by tensions in Somaliland’s eastern regions. ‘The situation in the east seems to be heading toward a denouement,’ said Michael Walls, a researcher at UCL who co-organised three election monitoring missions to Somaliland. He was speaking at an Africa Research Institute meeting on democracy in Somaliland.
Somaliland declared independence from Somalia in 1991, but has no international recognition. With relative stability compared to Somalia, the country has also undergone a protracted and troubled experiment with parliamentary democracy. At the moment parliamentary elections are five years late and are currently scheduled for mid-2015.
Walls highlighted the areas around Buuhoodletown, and the Sool region as being places where competition over resources has become more acute. The Nugaal Valley, which runs through Sool, is hoped to be a key site for commercial oil exploitation. A new autonomous state called Khaatumo and the more long-established autonomous state of Puntland are both making claims on the area, according to Walls.
‘In Sool, the divisions are much clearer and I think oil is something of a reason for that. There’s a feeling that if oil is found, everybody needs to make a claim early when it comes to deciding whose oil it is,’ added Walls. ‘The area around Sool could be a flashpoint for conflict,’ he warned. ‘At the moment all the involved parties are making a claim on the area and act as if those claims have substance. Although this ambiguity might be maintained it seems less likely.’
Ali Awale, Somaliland’s ambassador to the UK, was also speaking at the ARI meeting, where he stressed that international recognition would help stabilise the country.
‘We have unemployment of almost 80 per cent, and there are other challenges with Al-Shabaab trying to recruit young people,’ he said from the floor of the meeting in London. ‘People want to go abroad because of a lack of investment in the country, escaping through the deserts of Libya. Many have died there.’