Somalia/ Somaliland Petroleum Potentials Fact!.

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The Somali Republic gained independence on July 1, 1960. Somalia was formed by the union of British Somaliland and Italian Somaliland. Rebel forces ousted the Barre’s regime in 1991, but turmoil, factional fighting, and anarchy ensued. The Somali National Movement (SNM) gained control of the north, while in the capital of Mogadishu and most of southern Somalia the United Somali Congress achieved control.
In 1992, responding to the political chaos and humanitarian disaster in Somalia, the United States and other nations launched peacekeeping operations to create an environment in which assistance could be delivered to the Somali people. By March 1993, the potential for mass starvation in Somalia had been overcome, but the security situation remained fragile. On October 3, 1993 U.S. troops received significant causalities (19 dead over 80 others wounded) in a battle with Somali gunmen. When the United States (in 1994) and the UN withdrew (in 1995) their forces from Somalia, after suffering significant casualties, order still had not been restored.
A Transitional National Government (TNG) was created in October 2000 with the three-year mandate of creating a permanent national Somali government. Although they declared their independence, the TNG does not recognize Somaliland as independent republic but has been unable to reunite the country. Peace talks began in late-2002 and are ongoing. Somaliland has refused to participate in these talks saying that while it would welcome peace in former Italian Somalia, Somaliland is an independent country awaiting international recognition.
Somalia's economy, one of the world's least developed, has been further hampered by the country's ongoing internal strife. Reliable economic data is scarce, and the TNG cannot manage the national economy while it struggles to gain control over the country. Livestock production (cattle, goats & sheep) is the mainstay and largest foreign exchange earner of the Somali economy. An outbreak of Rift Valley Fever (RVF) in southern Saudi Arabia and Yemen (the first reported outside Africa) in 2000 led six Gulf States - Saudi Arabia, Bahrain, Oman, Qatar, Yemen and the United Arab Emirates - to ban livestock imports from the Horn of Africa. Middle Eastern countries are considering lifting the ban on livestock in early 2004. Another significant portion of the Somali economy, foreign remittances, have fallen significantly following the US government's closure of the Al-Barakat transfer company, which has been accused of transferring funds on behalf of Osama bin Laden and the Al-Qaida terrorist network. Remittances from abroad are estimated to be $200-$500 million annually.
While the TNG is in the process of reestablishing Somalia's Central Bank. Somalia is unable to receive IMF, and other multilateral aid due to the lack of institutions/financial infrastructure in place.


OIL AND NATURAL GAS
Somalia has no proven oil reserves, and only 200 billion cubic feet of proven natural gas reserves. Somalia currently has no hydrocarbon production. Oil seeps were first identified by Italian and British geologists during the colonial era. Exploration activities were
focused in northern Somalia, and several foreign firms, including Agip, Amoco, Chevron, Conoco and Phillips, held concessions in the area. The firms all declared force majeure following the collapse of the central government.
Exploration activity remains hindered by the internal security situation, and the multiple sovereignty issues. In February 2001 Total signed an exploration agreement with the TNG. The twelve-month agreement grants Total the rights to explore in the Indian Ocean off southern Somalia. Hassan Farah, TNG's Minister for Water and Mineral Resources, stated that the government would provide security during the exploration activities. Several factional leaders have denounced the agreement, and stated that the TNG did not have the authority to sanction the agreement, nor the power to guarantee the safety and security of the exploration operations.
In May 2001, Somaliland signed an agreement with U.K.-registered Rovagold and two Chinese firms, CPEC and CPC, for the right to explore for oil. Dubai-based Zarara Energy also signed an exploration agreement with Somaliland. The Somaliland government has said it will honor, until they expire, the existing contracts foreign companies signed with the Barre regime that are in their territory. None of the firms have resumed operations in Somaliland.
Somalia's petroleum consumption was an estimated 4,000 bbl/d in 2001. The organization officially responsible for all petroleum product distribution and retailing is the cooperative Iskash. The state-owned Iraqsoma Refinery Corporation operated a 10,000-bbl/d refinery outside of Mogadishu, but it has been inoperative since 1991. Total is involved in the downstream sector in Somaliland. It rehabilitated and manages the operations of the oil terminal in Berbera, Somaliland's primary port. Total also supplies fuel to airports located in Berbera and Somaliland's capital of Hargeisa.