Thu Jan 18th, 2007 at 03:23:59 PM EST
Greetings. As my first diary at European Tribune, I would like to post one that was previously posted at Daily Kos. While it didn't generate too much interest, a commenter urged me to cross-post it here as there would be people with a more intimate knowledge of the oil industry participating.
Another commenter drew my attention to a very important issue which, while I was aware of it, had not researched it thoroughly vis-a-viz the reported location of potential hydrocarbons in "Somalia". I have thus added on a post-script which was not included in the original diary at Daily Kos.
Before hopping the bridge, I must stress that I am neither an oil industry expert nor a geologist. I am just a concerned citizen who sees the current US incursion into Somalia as something more than merely an attempt to capture or kill three al-Qaida suspects under U.S. indictment for the embassy bombings in Kenya and Tanzania.
On January 8, I posted a diary at Daily Kos based in part on an old "news" article (dated January 18, 1993) wherein it was claimed that Somalia has a high oil potential. Applying that information to current events, it is hard to escape the notion that, just like in Iraq, the U.S. is currently not pursuing so much terrorists as it is pursuing control over oil resources.
The article also contained expressions by oil company executives and people from the administration of then President George H.W. Bush aimed at downplaying the oil factor in what was billed as a US sponsored humanitarian mission to Somalia:
But since the U.S. intervention began, neither the Bush Administration nor any of the oil companies that had been active in Somalia up until the civil war broke out in early 1991 have commented publicly on Somalia's potential for oil and natural gas production. Even in private, veteran oil company exploration experts played down any possible connection between the Administration's move into Somalia and the corporate concessions at stake.
"In the oil world, Somalia is a fringe exploration area," said one Conoco executive who asked not to be named. "They've overexaggerated it," he said of the geologists' optimism about the prospective oil reserves there.
Contrast that with the:
...highly successful exploration effort by the Texas-based Hunt Oil Corp. across the Gulf of Aden in the Arabian Peninsula nation of Yemen, where geologists disclosed in the mid-1980s that the estimated 1 billion barrels of Yemeni oil reserves were part of a great underground rift, or valley, that arced into and across northern Somalia.
Hunt's Yemeni operation, which is now yielding nearly 200,000 barrels of oil a day, and its implications for the entire region were not lost on then-Vice President George Bush.
In fact, Bush witnessed it firsthand in April, 1986, when he officially dedicated Hunt's new $18-million refinery near the ancient Yemeni town of Marib. In remarks during the event, Bush emphasized the critical value of supporting U.S. corporate efforts to develop and safeguard potential oil reserves in the region.
In his speech, Bush stressed "the growing strategic importance to the West of developing crude oil sources in the region away from the Strait of Hormuz," according to a report three weeks later in the authoritative Middle East Economic Survey.
Nevertheless, some people have criticised my conclusion to the effect that the current Somalia operation (by the US) is ultimately about oil. They cite references, however, which actually take issue with the assertion by geologist Thomas O'Connor, contained in the article, I cited in my previous diary:
"It's there. There's no doubt there's oil there," said Thomas E. O'Connor, the principal petroleum engineer for the World Bank, who headed an in-depth, three-year study of oil prospects in the Gulf of Aden off Somalia's northern coast.
"You don't know until you study a lot further just how much is there," O'Connor said. "But it has commercial potential. It's got high potential ... once the Somalis get their act together."
O'Connor, a professional geologist, based his conclusion on the findings of some of the world's top petroleum geologists. In a 1991 World Bank-coordinated study, intended to encourage private investment in the petroleum potential of eight African nations, the geologists put Somalia and Sudan at the top of the list of prospective commercial oil producers.
There is additional information here.
Now, the nay-sayers feel they have put the "lie" to that, based on this:
Somalia has no proven oil reserves and only 200 bn cf of proven natural gas reserves, according to the US Energy Information Administration.
I have highlighted the term proven oil reserves, because that seems to be at the root of this controversy. Let me reiterate that I'm no oil industry expert; nevertheless there are some issues surrounding the use of proven oil reserve figures. Mainstream oil industry analysts, including the US Department of Energy, all use the proven oil reserve figures.
However, geologists (presumably including Mr. O'Connor) and US Geological Survey (USGS) people, rely on a much broader definition of reserves that includes "unconventional" oil such as Venezuela's heavy crudes. These unconventional sources include tar sands, oil shales, oil not recoverable with today's technology. Hence the USGS people claim that the so-called proven oil reserves we often hear in public discourse actually underestimate total world reserves. For more on this, see THE OIL RESERVE FALLACY: Proven reserves are not a measure of future supply:
The news media nearly always use the proven reserve figures and omit other categories because the Department of Energy and the oil industry publish reports that include only "proven" oil reserves -- as if that is all there is. Most people do not realize that other petroleum geologists -- most notably those at the USGS -- take a different view.
Nevertheless, if perhaps someone with proper expertise within the Eurotrib community (or someone with knowledge of the the hydrocarbon potential of Somalia) could perhaps enlighten us some more on this aspect in the comments section below, I would truly be grateful.
The other point I want to make however is that aside from the existence (or not) of large oil reserves in Somalia, the country has a strategic significance based on its geographic location.
The US government's Energy Information Administration identifies the [sp.] Bab-Almandab Strait as one of the most strategic "world oil transit chokepoints".
A quick glance at a map of the Red Sea Region is all that is necessary to realize the strategic importance of the strait of Bab-el-Mandeb (south eastern corner of the map near Djibouti). It links the Red Sea with the Indian Ocean via the Gulf of Aden (partially pictured) and hence controls access to the Suez Canal. A closure of this strait would have serious consequences, since it would force tankers to transit around the Cape of Good Hope. Djibouti, which sits on one side of the strait already plays host to a U.S. military presence:
Djibouti has already turned into one of the most important US military bases throughout the world. Here, US forces monitoring assumed terrorist groups in the Middle East, Africa's Horn and East Africa are headquartered. Located only 50 kilometres south-west of the Arabian Peninsula, stable and pro-Western Djibouti is also a major US military safety net in the region as their presence becomes increasingly controversial on Arab soil.
It was the U.S. base in Djibouti that provided the Air Force AC-130 gunship which recently struck southern Somalia. My guess is we haven't seen the end of this.
Given "the growing strategic importance to the West of developing crude oil sources in the region away from the Strait of Hormuz,", as noted by Bush, and other developments like this, the location of Somalia near the strategic "chokepoint" appears to be of great value to Western powers along with its yet-to-be-quantified oil potential.
P.S. One very important consequence of the collapse of the government of Siad Barre (or perhaps more properly the short lived gov't of Ali Mahdi Muhammad, his successor) in 1991 was the formation of Somaliland in the area roughly encompassing the former British protectorate of Somaliland. This unrecognized de facto sovereign state occupies the northern region of what was once part of Somalia which is precisely where it was "speculated" the oil was to have been (or is). The Wikipedia entry for Somaliland (under "economy") makes this very interesting statement which sums up the implications for oil "prospecting" in the region:
It is believed that the coast of Somaliland contain large deposits of crude oil; due to this the economy of Somaliland could boom. Unfortunately, foreign companies cannot invest and benefit from this because the country is internationally unrecognised.
Furthermore, it is reported that when Siad Barre fled Somalia, he took with him the oil contracts. According to this source:
Some of the old exploration concessions were in a part of northern Somalia that is now within the territory of Somaliland, which declared independence from the rest of Somalia in 1991. Somaliland, which is not recognised internationally, is also seeking to develop its energy sector but must try to avoid conflict with the earlier accords signed by the internationally recognised pre-war Somali government based in Mogadishu.
Despite this, I am still not convinced that the US did not have oil in mind when it decided to intervene (by proxy) in Somalia. Somalia may still have oil in its territory (ie. Puntland). However, given the ambiguous "status" of Somaliland, what is clear to me is that there is a potential powder-keg waiting to explode if Somaliland is able to confirm vast deposits of oil and proceeds to exploit them.