Rush for Somalia oil may destabilize fragile government: critics

MOGADISHU, Somalia,- There are growing concerns that a groundbreaking oil exploration contract between the Western-backed transitional government of war-torn Somalia and a British-registered company could further destabilize the East African country.
 
 
East Africa is experiencing a major oil and natural gas boom that will transform the economies of a half dozen states on Africa's Indian Ocean coast, so the prospects of striking oil in Somalia are rated highly.
 
 
But, as U.N. investigators warned this year, the worry is that oil exploration across the shattered state, torn by clan wars and Islamist insurgency since 1991, risks "exacerbating clan divisions and therefore threaten peace and security."
 
 
"Oil companies should cease and desist negotiations with Somali authorities," the U.N. Monitoring Group cautioned the U.N. Security Council in July.
 
 
Soma Oil and Gas Exploration, headed by Lord Michael Howard, a former leader of Britain's ruling Conservative Party, signed Somalia's first deal with an international oil company, albeit an untested one, Aug. 6. The agreement gives Soma, formed in July, the right to apply for as many as 12 oil blocks in an area the Financial Times says oil majors consider "one of the final frontiers for the commodity."
 
Soma is expected shortly to launch a seismic survey of onshore and offshore locations.
 
 
The signing in Mogadishu, Somalia's war-scarred capital, took place as the country appears headed for a new round of violence, as the Islamist al-Shabaab organization, with links with al-Qaida, was showing signs of reviving a long-running insurgency after a series of military setbacks in 2011-2012.
 
 
It's not clear yet why the government of President Hassan Sheikh Mohamud, installed only a few months ago with Western and United Nations backing, went ahead with the exploration deal since it had earlier voiced fears that the country was too fragile to risk an oil race.
 
 
But the government, which many observers suspect will turn out to be as corrupt as previous Somali administrations since 2006, appears to have been persuaded to change tack.
 
 
Abdirizak Omar Mohamed, Somalia's minister for natural resources, told the Financial Times Lord Howard's status and high profile - he was Britain's home secretary, or interior minister, in 1993-97 and leader of the Conservatives in 2003-05 - had a lot to do with the Mogadishu government's switch.
 
 
Howard argued allowing oil exploration would increase stability by boosting state revenue for a government that's totally dependent on foreign handouts.
 
 
"We realized we had to take a different approach," Abdirizak said.
 
 
The British have been pushing for oil exploration for some time, along with Turkey, Norway, Qatar and others seeking to drill in Somalia and its waters in the Indian Ocean.
 
 
London has succeeded in edging out key competitors like Norway, while prospects in Somalia grew as major strikes have been made further south in the past few years - mostly offshore, mainly off Mozambique and Tanzania - in geological strata that appear to extend along the whole Indian Ocean coastline.
 
 
The Soma deal has made waves in the oil industry, which had expected a public licensing round for the oil blocks.
 
 
Some majors, like Anglo-Dutch Shell (NYSE:RDS.B, Stock Forum) and France's Total (NYSE:TOT, Stock Forum) - which had signed up for blocks during the 1980s but never proceeded with them because Somalia collapsed into perpetual warfare following the ouster of dictator Mohammed Siad Barre in 1991 - have put them on ice until "conditions allow."
 
 
Some oil has been found in the breakaway semi-autonomous regions of Somaliland and Puntland in northern Somalia. This has encouraged expectations that strikes can be made in other regions, and possibly in neighboring Ethiopia as well.
 
 
Somaliland and Puntland have largely escaped the violence that has torn Somalia apart, but the dozen or so oil companies drilling there have to be protected by militias or private forces.
 
 
In some cases, exploration blocks awarded by the two regions overlap, as with Norway's DNO International (OTO:DTNOF, Stock Forum) and the Canadian-listed Africa Oil Corp (TSX:V.AOI, Stock Forum).
 
 
"Potentially, it means that exploration and operations in these blocks, conducted by both DNO and Africa Oil under the protection of regional security forces, allied militia or private forces, could generate new conflict between Somaliland and Puntland," the U.N. report warned. "It is alarming that regional security forces and armed groups may clash to protect and further Western-backed oil companies' interests."

East Africa: EAC to Scrutinise Somalia's Request to Join Regional Bloc

BY ERIC KABEERA

Member states of the East African Community have agreed to set up a verification committee to analyse whether Somalia fulfils the requirements to join the bloc.

The Horn of Africa nation submitted its application in February 2012 to be a member of the community which currently brings together Burundi, Kenya, Rwanda, Tanzania and Uganda.

A Council of Ministers meeting that convened in Arusha, last week, approved the committee and directed partner states to nominate three members that would travel to Somalia in December to assess the requirements as stipulated in the EAC Treaty.

The vetting process will take over seven months, according to a subsequent communiqué from the meeting. The list of experts to participate in the exercise will be submitted by October 31.

The process will take into account the country profile and the level of compatibility with the EAC community stages of development in trade liberalisation and development, cooperation in investments and industrial development.

Other areas to be scrutinised include whether the conflict-torn nation has a well functioning monetary policy among other indicators.

Prudence Sebahizi, the national coordinator of the East African Civil Society Organisations Forum (EACSOF) believes that if Somalia joined, the EAC would benefit through cementing regional security.

For security:

"There is no much economic benefit (from Somalia) at the moment. Maybe we can look at the future but for now, Somalia's membership should be mainly looked at from the security perspective," said Sebahizi, who a few years ago was the chief negotiator for Rwanda during the negotiations for the EAC Common Market.

The EAC Treaty sets out conditions for membership, including adherence to universally acceptable principles of good governance, democracy, rule of law, observance of human rights and social justice.

It further stipulates that for a country to be allowed membership, it should be able to contribute towards the strengthening of integration within the region, geographical proximity between it and partner states and establishment and maintenance of a market-driven economy.

The Director of Institute of Research and Dialogue for Peace (IRDP) Prof. Pierre Rwanyindo Ruzirabwoba, an economist, observed that Somalia possessed opportunities for the community, calling for a faster admission process.

He added that it would create a wider market for the EAC goods since the country possesses a long coastline along the Indian Ocean.

"Unity is also a significant factor for the community. Somalis are our brothers and sisters who need assistance to fight the terrorists who have devastated their social fabric," he said.

He said already, East Africa through Kenya, Uganda and Burundi is part of the process to restore security in the country that until this year, had not had a functioning state for over two decades.

Somalia, with a population of 10 million, borders Kenya the Southwest.

Concerning the intentions by South Sudan to join the bloc, the ministerial council established a High Level Task Force to initiate direct negotiations with the Juba government.

South Sudan applied for entry into the EAC only months after it seceded from Sudan in 2011.

Sudan itself had its request rejected on the premise that it shared no geographic boundaries with any EAC member state.

Source: newtimes.co.rw

Aid agencies call on Barclays Bank to keep Somali lifeline open

A woman waits to perform a transaction with a currency dealer at an open-air forex bureau along the Bakara open air market in Somalia's capital Mogadishu, March 14, 2013. REUTERS/Omar Faruk

Author: Katy Migiro

(updates with Barclays' decision to delay the closure of the accounts and Oxfam's reaction to this)

NAIROBI (Thomson Reuters Foundation) – Oxfam, CARE and seven other aid agencies on Monday called on Barclays Bank to scrap plans to close several money transfer accounts that provide a lifeline to millions of Somalis who depend on remittances to survive.

Barclays had planned to close a number of accounts used by Somali transfer firms in the U.K. on Tuesday because of fears the funds might end up in the hands of groups branded as terrorists, such as the al Qaeda-linked al Shabaab.

The bank said on Monday afternoon it would postpone the closure of the accounts until September 30, a delay Oxfam said amounted to no more than "a short stay of execution."

Diaspora remittances are the biggest foreign currency earner for Somalia, which is slowly emerging from two decades of civil conflict and recurrent drought. An estimated 600,000 to 800,000 Somalis living abroad send home about $1.3 billion a year to their relatives.

Somalis are finding it increasingly difficult to make these transfers because banks worry they will be held responsible if the money falls into the hands of militants. Virtually all major US banks have stopped offering remittance services to Somalia and Barclays is the only U.K. bank still doing so.

“The banking rules are illogical, cold hearted and counter-productive. It leaves families already struggling to make ends meet to go without,” said Mark Goldring, Oxfam’s chief executive.

“Somalia will find it hard to work its way out of poverty and instability while its people are needlessly denied the financial support from their loved ones abroad.”

WORSE THAN 2011 FAMINE

Last month, a senior United Nations official spoke out against Barclays’ plans, saying it would have a direct humanitarian impact on Somalia, where several regions of the country have barely emerged from famine.

The Overseas Development Institute, a British think-tank, warned that cutting remittances “could be even worse and much longer lasting than the 2011 famine”, which killed some260,000 people.

Somalis in the U.K. send over $157 million a year to friends and families in Somalia, where the average income is about $300 a year.

It is impossible to send money from the West to Somalia via bank transfers because Somalia’s commercial banking system collapsed in the 1990s after the fall of dictator Siad Barre.

Instead, money is sent using money transfer operators, such as Dahabshiil, whose bank accounts gradually are being closed down.

Aid agencies said Barclays should delay plans to shut down the accounts for at least a year so that governments and banks can agree on regulations to enable money transfers to continue while addressing money laundering concerns.

Source: trust.org

Christian mother killed, boy kidnapped in Somalia

Detail of clothing on body of Fartun Omar murdered
aunt of kidnapped boy. Morning Star News photo

Islamic extremists from the Al Shabaab rebel group are suspected of killing a Christian woman in one town last week and kidnaping a 13-year-old boy from another, sources said.

According to a story by Morning Star News, the militants, who have vowed to rid Somalia of its underground church, are suspected of killing Fatuma Isak Elmi, 35, on Sept. 1 at about 7:30 p.m. inside her home in Beledweyne, Hiran Province in south-central Somalia.

Her husband had received a threatening note that morning believed to be from the Islamic extremist group and was away at the time of the murder.

Neighbors were alerted to the killing when they heard Elmi's 4-year-old son crying.

"The neighbors heard a child crying for quite some time," a source told Morning Star News. "After one hour, a close neighbor visited the house and found the child outside still crying."

The neighbor, whose identity is withheld for security reasons, told the source that upon entering the house she found Elmi dead.

Elmi's husband, 36-year-old Mumin Omar Abdi, learned of her death when he arrived home at about 10 p.m. He said he had found a note early that morning that read, "We shall come f or you. You are friends with our enemies (Westerners, assumed to be Christians), and you are polluting our religion."

Abdi has fled the area with his son to an undisclosed location, the source said.

Kidnapping

In the southern Somali town of Qoryoley in the Lower Shebelle Region, two witnesses told Morning Star News they saw armed, masked men from Al Shabaab kidnap a 13-year-old boy on Sept. 3 as he approached his home on his way back from school.

Mustaf Hassan was kidnapped near Marka District at about 4 p.m., the sources said. He had been staying with a Muslim relative there since last year, when his parents fled the area after they were suspected of being Christians, another source told Morning Star News.

Another source told Morning Star News that the boy's parents, Hassan Mohammed and Farhio Omar, were in great pain and grief upon learning of the kidnapping.

"Our son might be killed, and we are also not safe," Mohammed said.

No ransom has been sought, and Christians suspected the rebels may have abducted Mustaf in an effort to find his parents or other Christians.

Mustaf is the nephew of Fartun Omar, shot to death by Al Shabaab on April 13 in Buulodbarde, 12 miles from Beledweyne.
Morning Star News reported that Omar was the widow of Ahmed Ali Jimale, a 42-year-old father of four, who was killed on Feb. 18 as he stood outside his house in Alanley village on the outskirts of Kismayo.

On Aug. 5 in Bulo Marer, Lower Shebelle Region, three masked men suspected of being Al Shabaab rebels abducted Shamsa Enow Hussein, a 28-year-old mother of two, outside her home after determining that she was a secret Christian, her husband said.

Al Shabaab, said to have ties with Al Qaeda, is battling the Somali government that replaced the Transitional Federal Government on Aug. 20, 2012.

On June 7 in Jamaame District in southern Somalia, insurgents from the group shot 28-year-old Hassan Hurshe to death after identifying him as a Christian, sou rces said. Al Shabaab members brought Hurshe to a public place in the town of Jilib and shot him in the head, they said.

On March 23, Al Shabaab militants in Bulo Marer jailed and tortured a Christian, 25-year-old Hassan Gulled, for converting from Islam, Morning Star News reported sources said.

On Dec. 8 2012 in Beledweyne, 206 miles north of Mogadishu, gunmen killed a Christian who had been receiving death threats for leaving Islam. Two unidentified, masked men shot Mursal Isse Siad, 55, outside his home, Muslim and Christian sources said.

Siad and his wife, who converted to Christianity in 2000, had moved to Beledweyne from Doolow eight months before. The area was under government control and there was no indication that the killers belonged to the Al Shabaab rebels.

However, Morning Star News reported, the Islamic extremist insurgents were present in Buulodbarde, and Christians believed a few Al Shabaab rebels could have been hiding in Beledweyne.

In the coastal city of Barawa on Nov. 16 201 2, Al Shabaab militants killed a Christian after accusing him of being a spy and leaving Islam, Christian and Muslim witnesses said. The extremists beheaded 25-year-old Farhan Haji Mose after monitoring his movements for six months, sources said.

Mose drew suspicion when he returned to Barawa, in the Lower Shebelle Region, in Dec. 2011 after spending time in Kenya, according to underground Christians in Somalia.

Kenya's population is nearly 83 percent Christian, according to Operation World, while Somalia's is close to 100 percent Muslim.

Source: christiantoday.com