Marathon, PETRONAS, and PexCo Oil and Somalia

More information on the Somalia, Oil, and possibly TopCat continue. Reporting from Oil and Gas Investor indicates Marathon Oil, of Texas, and possibly other firms have taken over the Conoco claims, or at least is moving in on them, and bumping yet another company to boot.

From the Nov 2005 issue, emphasis added:

4. Mixed messages are being sent about licensing in Somalia with a Dutch firm taking acreage but an Australian firm, which thought it had won a block, being told it had negotiated with the wrong people. [Dutch] PexCo exploration has signed up for with the Ministry of Mines and Energy for exploration in the Ogaden area, according to reports in Ethiopia. The company has taken the Ferfer and Abred blocks covering 18,546 sq miles (29,865 sq km) and has agreed to spend US $5 million in the initial term.

However, Range Resources [an Australian firm] has had its claim over the Puntland region put in doubt. Somali Prime Minister Ali Mohamed Gedi said the deal with the regional government was invalid as only the country’s transitional federal government could negotiate the sale.

This contradicts Range’s statement on its website (picture at left in case site changes) that it received in written approval for the deal from the Somali government. Gedi had said that foreign companies and investors that local administrations could not legally negotiate contracts over natural resources.

“Foreign companies should desist in attempts to deal with local authorities … without prior written consent from the federal government,” he said.

On 19 October 2005 it was announced Petronas (Malaysian) and PexCo (Dutch) (More here and also here, but very little on PexCo), had signed deals with the Ministry of Mines, giving them rights to some of the same regions as Range, also reported on 15 November 2005.

On 6 October 2005, Range Resources eyed "Puntland as one of the remaining under-explored areas in the world that has a high potential for vast reserves of hydrocarbons." Their PowerPoint presentation [also stored locally here] indicates a positive co-operative relationship with the indigenous population, with the intent

to facilitate the exploration and commercial development of the State’s natural resources (farm in, joint venture) to bring the commensurate benefits to the people of Puntland and shareholders of the Company

Range believes this is possible because the "Political situation in Puntland is stable with a respected President with no civil unrest like that currently affecting Mogadishu".

The logical, but possibly coincidental, connection is with the Australian / Canadian HAZFA partnership (read more here). The Range Resources Code of Conduct, prominently available on their website, is clear and straight-forward. The Marathon Oil Code of Conduct, has a different feel and tone. Much of this difference is undoubtedly the result of Marathon’s far greater size.

The cooperative agreement signed between Somalia and Ethiopia on 1 Dec 2005 came with pledges of assistance to calls "upon the international community to extend financial and political support to the transitional government and take measures on those forces who attempt to hamper peace in Somalia" [emphasis added]. Further, the "African Union, European Union, UN, World Bank and other donors pledged for their continued support to the Transitional Government of Somalia."

It seems maybe some oil resource competition is happening. Is there payback for Malaysia for its assistance in GWOT (PETRONAS is wholly government owned)? Or is there something else because of a Chinese connection (PETRONAS contracted Zhongyuan Petroleum Exploration Bureau)?

The Zhongyuan Petroleum Exploration Bureau (ZPEB), a powerful subsidiary of China’s second largest national petroleum consortium, the China Petrochemical Corporation (SINOPEC), appears to be the principal oil firm operating in Gambella at present, under subcontract to Malaysia’s national oil company PETRONAS. The base camp for ZPEB equipment and petroleum explorations is located approximately 1.5 kilometers from the center of Gambella town on the Abobo-Gambella road. The Ethiopian site manager, Mr. Degefe, is a highlander who tersely describes himself as "responsible for making all operations and security." The base camp is under tight security and heavily guarded by EPRDF troops. PETRONAS and the China National Petroleum Corporation currently operate in Sudan. A recent report by Human Rights Watch raises charges that the Asian oil giants have provided cover for their respective governments to ship arms and military equipment to Sudan in exchange for oil concessions granted by Khartoum.

If this last item is a critical piece of the puzzle, then getting back to the original story about TopCat is about USG counters against China and not about US oil interests directly, but blocking Chinese? If so, then again, why pick TopCat??

Is this why Rumsfeld has asked the IG probe Feith and the Pentagon? The IG is a direct report to the SecDef and if Feith was working for Rumsfeld, why would he call this? As CYA if something blows up? Or, here’s the Black Helicopter version (are no more Black Helicopters since FEMA has been gutted?): Rumsfeld calls the IG probe to placate Congress as cover for another internal investigation that he is not happy with? There are serious differences between the civilian elite and military elites.

9 thoughts on “Marathon, PETRONAS, and PexCo Oil and Somalia

  1. Prime Minister Gedi, has approved the deal. His letter is posted on Range Resources Website. Not sure who’s leg your trying to pull!

  2. Hale,I think you misunderstood the post. Prime Minister Gedi of the Transitional Government (TG) is not the issue. The point of this post is the actual power of the TG. As you point out with the PM’s letter, there is an apparent belief and willingness to move forward. This post highlights contradicting and combative statements by others, including corporations, for the resources and power Prime Minister Gedi represents.

  3. Matt,Thanks for the Reply:
    1) From your post and I quote “This contradicts Range’s statement on its website (picture at left in case site changes) that it received in written approval for the deal from the Somali government. Gedi had said that foreign companies and investors that local administrations could not legally negotiate contracts over natural resources.”
    Written approval has been received and is not a contradiction, as you claim.
    Its pretty clear that PM Gedi has provided his support and validity to Range Resources.
    2) Ethiopia and Somalia are two different countries.
    The Pexco reported on the Alexander’s website on the 19/10/2005 states the following, and I quote:
    “Ethiopia and Dutch Pexco sign exploration and development deal
    19-10-05 The Ministry of Mines and Energy [Alemayehu Tegenu , Ethiopia] and the Pexco Exploration, a Netherlands-based company, signed an agreement that enables the latter to carry out petroleum exploration and development activities in the Ogaden area of the Somali State. ”
    Source: The Ethiopian Herald
    Why would the minister of Mines and Energy from Ethiopia sign an exploration deal located in the Republic of Somalia?
    You do know that there is The State of Somali within in Ethiopia?
    The State of Somali is located in the eastern and south eastern part of Ethiopia. The State has common boundaries with Afar and the Republic of Djibouti in the north, Kenya in the south, the State of Oromiya in the west, and Somalia in the east and in the South.” The capital is Jijiga.
    This means that Somali State includes the whole of Eastern Ethiopia, including partially or completely the old provinces of Harerge, Bale, Sidamo and eventualy portions of neighboring provinces such as Welo, Shewa or Arsi. Again, the new capital is a relatively small center (this seems to be a pattern), this time quite off-centered. Jijiga is located in the north of the old state, half-way between the old capital of Harerge and the somalian border (50-60 km from both).
    3) As for HAFZA I think you’ll find that the Puntland administration has not proceeded with the deal, and its stated on their website. Maybe you have further information that supports to the contrary?
    I quote from HAZFA’s website:
    “HAFZA suspended operations in Puntland during May 2005 pending obtaining sufficient laws from the Puntland Government to safeguard long term ownership or rights to investors participating in the Free Zones.”
    I’m really not sure why you are posting such information without having it validated?

  4. Hale,Your comments are valid and well thought out. After going back through and seeing what you correctly point out, I feel my response deserves its own post. Let’s move the discussion over there and I would enjoy our continued discussion on this.
    Here is what is essentially my reply: Ogden, Gedi, EPRDF/TPLF
    -Matt aka MountainRunner

  5. Puntland’s agreement with Range is not only “null and Void but also violates international law.Secondly, according to what has been pumped up by range resource officials the whole of Puntland covering 212,000 square kilometres cannot surely fall under one company that has the motives of blocking other viable companies from Investing in the Natural ressources sector of Somalia.A technical team will revisit and create Blocks that can be viable for both Oil and Mineral exploration- no survey was done since the collapse of the Somali state.Amsas consulting was instrumental in the creation of the State of Puntland and it’s CEO was also a former Presidential candidate for the Federal Somali elections in kenya in October,2004.He is also a Energy Expert who has worked in kenya, Zambia,Zaire, Australia and many other parts of the world.

  6. I think you will find that HAFZA is run out of Sydney Australia, not Canada. It has no affiliation with Range Resources, headquartered in Melbourne. HAFZA have not proceeded with their venture just at the moment due to the issue of legal property ownership in Puntland/Somalia.Range on the other hand have full mineral rights, not only ratified and supported by the Puntland Government, but also with the Somali TG. Puntland and TG Heads are keen to Australians involved rather than US or European companies for the obvious reasons.
    Foreign investment is just what Somalia needs to break the perpetual cycle of Tribalism and bring the people onside with a national government that has the money to provide hospitals, schools, social services and security.
    Just a few thoughts….

  7. iam student in malaysia,my countary was the first counteries in horn of africa, but as you know somalia all of the parts fled away for the sake of civil wars. so united they recognize that somali has many resources such gas petrouliam and oil. so all things somalia they can’t abble to produce theire resources so we need a big investiment a side of producing gases. thank you

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