British company enters Somalia; police investigate Nigeria

Somalia’s President, Hassan Sheikh Mohamud, 
who will make a year in office next month, appears 
keen to establish his country’s oil and gas potential

In the first oil and gas deal since Somalia’s pacification by Ugandan troops, the new government in Mogadishu has given extensive exploration rights to a UK-based company chaired by a former British cabinet minister and leader of the Conservative Party.


The deal will allow the recently-formed Soma Oil and Gas to apply for licences in up to 12 blocks in return for undertaking an extensive seismic survey and handing over the data to the government, according to a Financial Times report.

Soma is chaired by Lord Michael Howard, who led the UK Conservative Party from 2003-05.  According to the Financial Times, Somalia’s minister for natural resources, Abdirizak Omar Mohamed, said Lord Howard’s high profile was “critical to agreeing the deal.”

Over the last two years, the UK government has hosted two major conferences on the future of Somalia, while Ugandan forces, combined with peacekeeping contingents from Burundi and military intervention from Kenya, were wresting control from Al-Shabaab salafist militants.

The Financial Times notes that Somalia’s government earlier said it would not hand out exploration licences until new oil laws were put in place, acknowledging that the country is “too fragile to risk oil exploration because it was likely to pit different regions and warlords against each other.

Lord Howard appears to have changed the government’s mind.

Nigerian ex-oil minister grosses US$ 1 billion

Meanwhile, according to a Reuters report, British police are investigating a US$ 1.3 billion deal in Nigeria, where the Anglo-Dutch company, Shell, and Italian oil major, ENI, bought exploration rights over a block thought to contain up to 9 billion barrels of oil.

Former Nigerian oil minister, Dan Etete, had in 1998 awarded the block to a company he was “closely associated with” for just US$ 2 million.

He is alleged now to have received US$ 1.09 billion by selling the rights to the European companies, grossing a profit of US$ 1,088 million.

A Shell spokesman told Reuters it had bought the block from the government, and that it acted in accordance with Nigerian law.

However, according to the Reuters report, transparency campaigners insist that the government of Nigeria was acting as a go-between, and government sources confirm that they passed on US$ 1.09 billion to Etete.
Activist pressure has led Scotland Yard’s ‘proceeds from crime’ unit to open an investigation into possible money-laundering.

A French court has previously convicted Etete of money laundering.

Report by NY