Somalia: An Oily ClichŽ

Today, it is a reflexive cliché to claim the United States (U.S.) is off on another oil-acquisition conquest anytime they invade an Arabic nation.

In the case of Somalia, the cliché may neverless true. While undoubtedly, the U.S. and its Ethiopian proxy conqured Somalia and “liberated” it from the clutches of Al-Qaeda primarily for geostrategic reasons (possible launching point to attack Iran, more friendly territory close to Arabic Sudan, more ports under their control, a possible regional base for the AFRICOM command post, potential launching points to protect the Strait of Hormuz [the primary shipping point of Middle Eastern oil], etc), Somalia is awash in unspoken oil and provides a tantalizing business opportunity.

Perhaps We Had Better Start From the Beginning?

The story begins in 1990, just prior to the horrible famine of almost Biblical porportions that claimed thousands of innocent lives in Somalia. Mohamed Said Barre was in charge of the country. Barre signed of nearly two-thirds of his country to Conoco, Amoco, Chevron, and Phillips (this was prior to the Conoco-Phillips merger). Unfortunately for them, Barre was overthrown by Mohammed Farah Aideed of the rival Hebr Gedr clan in January 1991 and launched a civil war shortly thereafter.

After Aideed started the civil war, the oil giants were unable to work their concessions for two reasons. One, the constant fighting, robbery, and pirating off the coast made it impossible. Second, it was technically illegal because Somalia did not have a recognized government. Since Somalia was run by a that it was illegal to do business with, the oil companies were out of luck. Either the U.S. had to legitimize Aideed in the eyes of the international community or remove him. Either way, the fighting had to stop.

As one of his last acts as President, George H.W. Bush (who owned oil concessions across the Gulf of Aden in Marib, Yemen via Hunt Oil) sent the first wave of U.S. soldiers to Somalia to officially help deliver food to starving Somalis. Meanwhile, U.S. Special Envoy to Somalia Robert Oakley kept in daily contact with Aideed from December 1992 to May 1993. He was unsuccessful in his negotiations to end the fighting. President Bill Clinton then resorted to “Operation Restore Hope.” Conoco’s office in Mogadishu served as a de facto U.S. Embassy for the landing Marines after the original building was shelled and looted. Mr. Oakley and Marine General Frank Libutti wrote a letter of commendation to Conoco Somalia’s General Manager Raymond Marchand thanking him for his service.

After a series of unsuccessful assassination attempts by U.S. forces, the Somalis struck back during a U.S. raid in the infamous “Blackhawk Down” incident (the U.S. Army dubbed it the “Battle of the Black Sea” while the Somalis’ called it “Maalinti Rangers” [Day of the Rangers]) on 3-4 October, 1994 that claimed the lives of 18 Americans and one Malaysian soldier. President Clinton pulled out of Somalia and the place was left to its own devices while the U.S. cultivated relationships with Ethiopian Prime Minister Meles Zenawi, Djibouti’s President Hassan Gouled, and Eritrea’s President Isaias Afewerki. Aideed was assassinated in 1996 by Osman Hassan Ali Atto.

Somalia continued to be deeply fractured after the death of Aideed. The extreme northwest corner of Somalia, known as Somaliland, declared independence in 1991, but did not receive any diplomatic recognition. The adjacent region to the east, known as Puntland, followed suit in 1998 under the leadership of presidency of Abdullahi Yusuf Ahmed, but with one major difference. They only wanted to be a separate Somali state, not a country.

Flash Forward?. Puntland had some lucrative oil concessions, but the turnover of governments left most of the contracts null and void. The companies also faced a legal problem. Since Puntland was not its own autonomous state, the companies had to deal with the central government in order to do business. The problem was?there was no central government entity. That needed to be changed.

Somalia began toying with creating a government in 2001. Indeed, the French oil giant TotalElfFina signed an agreement with the Transitional Government for a concession in southern Somalia. After lots of jockying for power between the clans, the first government plan was signed in July 2003. Kenya was overseeing the process and the federal charter was signed in September 2003.

Fighting broke out again in 2004, particularly in the south, and it reached Mogadishu by the end of May. As a result, the Somali Government was in exile in Nairobi. Despite the chaos, parliament members were sworn in during August 2004. They voted Abdullahi Yusuf (from the Darod clan, which is not liked in Mogadishu) president. Mr. Yusuf is a career soldier who served as Somalia’s mlitary attaché to the Soviet Union. When the U.S. backed Barre’s rise to power, Mr. Yusuf refused to turn on his Soviet Allies and was imprisoned. After he was released, he took part in a failed coup attempt on Said Barre. He fled to Kenya and befrended the Ethiopians. He later returned to northern Somalia and ran Puntland since its independence in 1998, making him a valuble ally to U.S. oil interests if he could shed his communist-supporting background.

In December 2004, Ali Mohammed Gedi was appointed the Prime Minister. He hails from the Abgaal sub-clan of Mogadishu’s Hawiye clan, one of the two largest clans in the country. The new government relocated to Mogadishu and by May 2005, Mohammed Qanyare Affrah, Osman Ali Atto, and Muse Sudi Yalahow united their militias as a de facto government army. By late 2005, the government’s transition process was derailed.

Some factions were not happy the largest clans possessed all the power positions. President Yusuf and Prime Minister Ghedi both survived assassination attempts and retreated back to Kenya. By October 2005, the Transitional Government was purchasing large amounts of arms from Yemen and arming allied clans to defend Mogadishu and Baidoa to the south. Ethiopia was also suppling the Transitional Government with weapons.

Contemporary History

From the beginning of 2006 until July, fierce fighting between rival clans and political movements occurred. It culminated with the Union of Islamic Courts (UIC) seizing control of Mogadishu, and in effect, the country, though most of the Transitional Government was still located in Baidoa. While Eritrea armed the UIC, the U.S. unsuccessfully backed the opposing forces, called the Alliance for the Restoration of Peace and Counter-Terrorism (ARPC).

The so-called warlords leading the ARPC, Mohamed Dheere, Bashir Raghe, and Mahamed Qanyare, had been spying for the Central Intelligence Agency (CIA) years. A U.S. diplomat at the Nairobi Embassy was even fired for criticizing the CIA’s policy.

Once again, U.S. business interests were thwarted and the UIC’s leader, Sheikh Hassan Dahir Aweys, was already on the U.S.’ official terrorist list for heading al-Itihaad al-Islamiya, a group supposedly linked to Al-Qaeda during the 1990s, making it illegal for them to do business with his regime.

“Slick” Business Deals

Beginning in 2005, Prime Minister Gedi demanded all business proposals go through the Transitional Government. He forbade anyone to approach the local administrations in Puntland, but he was willing to allow business there provided he approved of it. The Australian firm Range Resources Limited signed an agreement with the government of Puntland for exclusive rights to all their minerals, including oil, lead, zinc, copper, iron, manganese, tin, beryl, tantalum, niobium (columbium), uranium, coal, and gypsum.

Range Resources obtained permission to exploit the land from Puntland President Mohamud Muse Hirse on 18 October, 2005, and from Prime Minister Gedi on 2 November 2005. They are also bidding to buy addition consessions from the Korea National Oil Corporation (KNOC). Range Resources is run by Non-Executive Chairman Sir Samuel Kwesi Jonah. S

ir Jonah is a Board Member of: Lonmin, the Commonwealth African Investment Fund (Comafin), Transnet Limited, Anglo-American Platinum Corporation Limited, the Ashesi University Foundation, Equinox Minerals (Chairman), the uranium-producing nuclear power company UraMin Incorporated (Chairman), Anglo-American Corporation, Moto Goldmines Limited, Scharrig Mining (Chairman), Sierra Rutile Limited (Chairman), Sierra Resources Holding, Titanium Resources Group, Copper Resources Corporation (with George Arthur Forrest and George Andrew Forrest), Standard Bank Group of South Africa, Bayport Holding Limited, Transnet Limited, Equator Exploration Limited in Nigeria and São Tomé – Príncipe (with Baronness Chalker), and Mittal Steel (currently in the proverbial hot seat for a contract they signed with the government of Liberia).

He is a Advisory Council member of the U.N. Secretary General’s Global Compact, South African President Thabo Mbeki’s International Investment Advisory Council, the African Regional Advisory Board of the London Business School, First Atlantic Merchant Bank, Defiance Mining, Ghanian President John Kufuor’s Ghana Investors’ Advisory Council, President Obasanjo Nigerian Investors’ Advisory Council, and serves as a Presidential Advisor to President Mohamud Muse Hersi of the Somali state of Puntland. He also holds an honorary British knighthood, the Star of Ghana and several other international awards and titles.

Meanwhile, Perth-based Ophir Energy seeks to drill in Somaliland. Ophir is led by Alan Stein and is 50%-owned by South Africa’s Mvelaphanda Holdings. Mvelphanda is run by Tokyo Sexwale and its Board of Directors includes Michael Beckett (former Chairman of Ashanti Goldfields, a company prevously run by Sir Jonah), and Bernard Van Rooyen (former director of the Canadian firm Banro Resources). Ophir was reportedly introduced to Somalia by Mvelaphanda’s partner Dr Andrew Chakravarty, who’s wife is a well-connected Somali national. Mr. Chakravarty’s Rova Energy Corporation acquired offshore concessions formerly belonging to Equitable Life Investment Company and its U.S. partner Somapetroleum. Ophir currently is a 75% shareholder of Rova.

The Rest, as They Say, is History

Somalia’s Transitional Government desired to keep Puntland as a part of the larger Somalia. This fact, coupled with several nations’ unwillingness to work with the UIC (who may or may not recognize the contracts) led to a need to restore the Transitional Government in Mogadishu and remove the UIC. This line of thinking was directly in line with the U.S., who wanted to control Somali for the aforementioned geostrategic reasons and also to prevent the nation from becoming a “terrorist safehaven.” The U.S. backed Ethiopia’s invasion of Somalia to stamp out the UIC once-and-for-all. They also supplied air support and Special Forces soldiers to aid in the mission. The UIC was run into Kenya, where many of its leaders were arrested. Others fled into hiding in southern Somalia.

The U.S. officially continues to hunt Al-Qaeda in Somali. They are pushing for an African peacekeeping force to be deployed in the nation as soon as possible.

Unsurprisingly, two nations with a history of acting as U.S. proxies in the region answered the call. The Ugandan People’s Defense Force (UPDF) pledged two battalions to enforce the peace and train the Somali army. The U.S. has pledged to provide logistics support for Uganda,which likely will include airlift support.

If the private military contractor Military Professional Resources Incorporated (MPRI) gets involved in the logistics like they have in Darfur, the context of U.S. involvement in Somalia could take on a whole new outlook, especially if counterinsurgency operations become the norm.

MPRI offers a perfect opportunity to embed U.S. operatives to do the illicit bidding of the Pentagon the U.S. Armed Forces cannot. The Somali Government has been reinstalled in Mogadishu and though violence is constant in the city, the government has moved forward. Many of the cabinet members are dual citizens, with the majority coming from Canada. Others are former warlords.

The Deputy Prime Minister is Hussein Farah Aideed, the son of the late warlord Mohammed Farah Aideed. In contrast to his father, Hussein is actually a naturalized American citizen and a former U.S. Marine who served in the Gulf War. He even served as a U.S. emissary during Operation Restore Hope, where he met with his father several times.

With a central government in place, the corporations with concessions in the more peaceful northern region of the country can begin their work. ConocoPhillips has stated they are not interested in doing business in Somalia at this time. Will ChevronTexaco and other American oil giants take advantage of the opportunity to exploit Somalia? Only time will tell, but Ophir, Rova, and Range Resources are probably grateful to the U.S. and Ethiopia.

1. Madsen, Wayne. “Genocide and Covert Operations in Africa 1993-1999.” Lampeter, Ceredigion, Wales, United Kingdom: Edwin Mellen Press, Limited. 1999. pg. 31.

2. “The Oil Factor In Somalia,” Mark Fineman. Los Angeles Times. 18 January, 1993.

3. Bowden, Mark. “Blackhawk Down: A Story of Modern War.” New York, New York: Penguin Putnam Incorporated. 1999.

4. “UN: Arms Pouring Into Somalia,” Al-Jazeera. 8 October, 2006.

5. “U.S. Secretly Backing Warlords in Somalia,” Karen DeYoung, Emily Wax. The Washington Post. 17 May, 2006. Note: A confidential U.N. Security Council report revealed several armed Islamic groups armed and fought with the UIC, including Hezbollah and fighters from several Islamic nations including Saudi Arabia.

6. “Somalia: Fighting in the Shadows.” Jeffery Bartholet, Michael Hirsh. Newsweek. 5 June, 2006. Note: One of the planners for these types of intelligence operations was Steven Cambone’s Deputy Undersecretary of Intelligence at the Pentagon, General William “Jerry” Boykin, who is known for his anti-Islamic comments. Boykin commanded the Delta Force team deployed in Mogadishu in 1993.

7. “Profile: Somalia’s Islamist Leader,” Joseph Winter. BBC News. 30 June, 2006.

8. Range Resources Limited. “Exclusive Rights to All Minerals in Puntland.” Company Announcements Office. 5 October, 2005.

9. President Mohamud Muse Hirse. “Letter to Consort Private Limited and Mr. Tony Black.” Office of the President. 18 October, 2005; Prime Minister Ali Mohammed Gedi. “Letter to Puntland State of Somali and Vice President Hassan Dahir Mohamud. Offic of the Prime Minister. OPM/251/05. 2 November 2006.

10. “Minnows See Oil Seeping Out From Fractured State,” Eleanor Gillespie, Jon Marks. African Energy. Issue 100. 20 July, 2006.

11. Ibid.

12. State House of the Republic of Uganda. “‘US to Provide UPDF Support to (sic) Somalia’ – Frazier.” Press Release. 29 January, 2007.

13. Confidential Source. 2007.

14. Kevin Sites. “Son of Aideed.” Kevin Sites in the Hot Zone. Yahoo News. 29 September, 2005.

Appendix I: Documentation

Letter from President Hirse to Consort Private Limited: Letter from Prime Minister Gedi to the Government of Puntland:

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