Somalia has rejected what it called an “illegal claim” by Genel Energy to petroleum rights in the breakaway region of Somaliland, dragging the UK-based company into one of East Africa’s most bitter territorial feuds.
Somaliland unilaterally declared independence in 1991 as Somalia exploded into civil war. Although the semi-autonomous region has remained largely peaceful for the past three decades its attempt to secure international recognition has stalled.
Leaders in Hargeisa, the capital, believe that deals with multinational corporations such as Genel Energy, which added Somaliland to its exploration portfolio a decade ago, will bring the official independence they crave, angering officials in Mogadishu, the capital of Somalia.
Somalia’s oil ministry said last week that it “categorically rejects Genel Energy plc’s claim to own petroleum rights in Somalia’s northern regions and calls upon Genel Energy plc to cease its illegal claim”. It added that it was the only institution authorised to grant permits. “Any authorisation granted in violation of Somalia’s laws and regulations is unlawful and would be considered null and void,” it said.
Somaliland defended its right to award licences. “The government has the authority to engage foreign investors in order to explore and exploit the Republic of Somaliland’s potential hydrocarbons and mineral resources,” its energy and minerals ministry said. “No one other than the Somaliland government has the authority to claim or award an exploration licence within Somaliland.
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“Somaliland is equipped with capacities of deterrence and resilience, allowing it to combat interference from those who seek to impede our progress.”
Genel Energy declined to comment.
The rebuke from Somali officials came days after Genel Energy said it had finished its geotechnical survey in Somaliland. “This provides the data from which to plan the main civil engineering work, set to commence in the new year,” the company wrote on Twitter in mid-December.
The Jersey-based oil company, which was brought to the London Stock Exchange in 2011 by Tony Hayward, the former boss of BP, and the financier Nat Rothschild, is valued at £347 million. It holds its biggest production assets in Iraqi Kurdistan and was awarded an exploration licence for two offshore blocks in Somaliland and stakes in a further three in 2012. It signed a farm-out deal with Opic Somaliland Corporation for a block on the Ethiopian border in 2021, its website says.
Oil and gas discoveries in Uganda, Mozambique and Tanzania have whetted investors’ appetites for east African hydrocarbons. In October Somalia granted seven offshore oil and gas blocks to the US-based Coastline Exploration.
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Somaliland has its own police force, army, currency and elected government and sits on a geostrategic choke point on the Gulf of Aden, through which a fifth of global trade passes annually, including a chunk of the Gulf states’ oil and gas exports.
