aggressive small companies with limited financial resources are securing lucrative oil concessions from Somaliland government. these concessions are granted by the minister of Energy, minerals, and water without
consulting the peoples’ representatives ( The parliament.) the government does not publicize the contents of these concession contracts to the public or the Parliament, and neither of them is in a position to judge whether these contracts are fair and beneficial to the citizens of Somaliland.
the only information publicly available about the terms of these concessions come from press releases and newsletters of the small companies to their investors and share holders. Many of these companies boast that they found “undervalued assets.” the use of this term “undervalued” indicates that in these contract negotiations, Somaliland’s side does not comprehend the true value of their resources and are, therefore, entering into bad contracts that favor the other side.
To make things worse, Somaliland government divided the entire country into oil prospecting blocks and announced that it is ready and willing to negotiate concessions with any and all foreign companies, small or large, irrespective of whether they have the financial resources to develop these resources. Somaliland president unequivocally announced in a speech in Washington DC that ” Somaliland is open for Business.”
in contrast, our neighbor, Ethiopia’s , decided to open few blocks in the eastern part of their country to oil and gas prospecting by foreigners. Late Ethiopian Prime Minister Meles Zinawi revealed the rationale behind this policy. he said in a speech to his parliament that ” Given the limited knowledge and sophistication of our people relative to that of the international oil companies, it is very likely that any deal we negotiate with foreign companies will not favor us and, therefore, our policy in to reserve as much of our natural resources to be negotiated by future generations who might be in a better position to negotiate a good deal.”
Somaliland’s lack of shrewd and wise resource policy is breeding a concession scramble among foreigners companies who are seeking to take advantage of its weak negotiating position. The latest concession (Block 18) was received by ****, a company 30% owned by the Sheik of Ras Al Kheima and Aljaabri.
to be continued.
By. Arta Abayn