America's interests in Somalia:
Four major U.S. oil companies are sitting on a prospective fortune
in exclusive concessions
January 3, 2007
This article was first published
in December 2001 on the raceandhistory.com forum.
Far beneath the surface of the tragic
drama of Somalia, four major U.S. oil companies are quietly sitting
on a prospective fortune in exclusive concessions to explore and
exploit tens of millions of acres of the Somali countryside.
That land, in the opinion of geologists
and industry sources, could yield significant amounts of oil and
natural gas if the U.S.-led military mission can restore peace
to the impoverished East African nation.
According to documents obtained by The
Times, nearly two-thirds of Somalia was allocated to the American
oil giants Conoco, Amoco, Chevron and Phillips in the final years
before Somalia's pro-U.S. President Mohamed Siad Barre was overthrown
and the nation plunged into chaos in January, 1991. Industry sources
said the companies holding the rights to the most promising concessions
are hoping that the Bush Administration's decision to send U.S.
troops to safeguard aid shipments to Somalia will also help protect
their multimillion-dollar investments there.
Officially, the Administration and the
State Department insist that the U.S. military mission in Somalia
is strictly humanitarian. Oil industry spokesmen dismissed as
"absurd" and "nonsense" allegations by aid
experts, veteran East Africa analysts and several prominent Somalis
that President Bush, a former Texas oilman, was moved to act in
Somalia, at least in part, by the U.S. corporate oil stake.
But corporate and scientific documents
disclosed that the American companies are well positioned to pursue
Somalia's most promising potential oil reserves the moment the
nation is pacified. And the State Department and U.S. military
officials acknowledge that one of those oil companies has done
more than simply sit back and hope for pece.
Conoco Inc., the only major multinational
corporation to mantain a functioning office in Mogadishu throughout
the past two years of nationwide anarchy, has been directly involved
in the U.S. government's role in the U.N.-sponsored humanitarian
Conoco, whose tireless exploration efforts
in north-central Somalia reportedly had yielded the most encouraging
prospects just before Siad Barre's fall, permitted its Mogadishu
corporate compound to be transformed into a de facto American
embassy a few days before the U.S. Marines landed in the capital,
with Bush's special envoy using it as his temporary headquarters.
In addition, the president of the company's subsidiary in Somalia
won high official praise for serving as the government's volunteer
"facilitator" during the months before and during the
Describing the arrangement as "a
business relationship," an official spokesman for the Houston-based
parent corporation of Conoco Somalia Ltd. said the U.S. government
was paying rental for its use of the compound, and he insisted
that Conoco was proud of resident general manager Raymond Marchand's
contribution to the U.S.-led humanitarian effort.
John Geybauer, spokesman for Conoco Oil
in Houston, said the company was acting as "a good corporate
citizen and neighbor" in granting the U.S. government's request
to be allowed to rent the compound. The U.S. Embassy and most
other buildings and residential compounds here in the capital
were rendered unusable by vandalism and fierce artillery duels
during the clan wars that have consumed Somalia and starved its
In its in-house magazine last month, Conoco
reprinted excerpts from a letter of commendation for Marchand
written by U.S. Marine Brig. Gen. Frank Libutti, who has been
acting as military aide to U.S. envoy Robert B. Oakley. In the
letter, Libutti praised the oil official for his role in the initial
operation to land Marines on Mogadishu's beaches in December,
and the general concluded, "Without Raymond's courageous
contributions and selfless service, the operation would have failed."
But the close relationship between Conoco
and the U.S. intervention force has left many Somalis and foreign
development experts deeply troubled by the blurry line between
the U.S. government and the large oil company, leading many to
liken the Somalia operation to a miniature version of Operation
Desert Storm, the U.S.-led military effort in January, 1991, to
drive Iraq from Kuwait and, more broadly, safeguard the world's
largest oil reserves.
"They sent all the wrong signals
when Oakley moved into the Conoco compound," said one expert
on Somalia who worked with one of the four major companies as
they intensified their exploration efforts in the country in the
"It's left everyone thinking the
big question here isn't famine relief but oil -- whether the oil
concessions granted under Siad Barre will be transferred if and
when peace is restored," the expert said. "It's potentially
worth billions of dollars, and believe me, that's what the whole
game is starting to look like."
Although most oil experts outside Somalia
laugh at the suggestion that the nation ever could rank among
the world's major oil producers -- and most maintain that the
international aid mission is intended simply to feed Somalia's
starving masses -- no one doubts that there is oil in Somalia.
The only question: How much?
"It's there. There's no doubt there's
oil there," said Thomas E. O'Connor, the principal petroleum
engineer for the World Bank, who headed an in-depth, three-year
study of oil prospects in the Gulf of Aden off Somalia's northern
"You don't know until you study a
lot further just how much is there," O'Connor said. "But
it has commercial potential. It's got high potential . . . once
the Somalis get their act together."
O'Connor, a professional geologist, based
his conclusion on the findings of some of the world's top petroleum
geologists. In a 1991 World Bank-coordinated study, intended to
encourage private investment in the petroleum potential of eight
African nations, the geologists put Somalia and Sudan at the top
of the list of prospective commercial oil producers.
Presenting their results during a three-day
conference in London in September, 1991, two of those geologists,
an American and an Egyptian, reported that an analysis of nine
exploratory wells drilled in Somalia indicated that the region
is "situated within the oil window, and thus (is) highly
prospective for gas and oil." A report by a third geologist,
Z. R. Beydoun, said offshore sites possess "the geological
parameters conducive to the generation, expulsion and trapping
of significant amounts of oil and gas."
Beydoun, who now works for Marathon Oil
in London, cautioned in a recent interview that on the basis of
his findings alone, "you cannot say there definitely is oil,"
but he added: "The different ingredients for generation of
oil are there. The question is whether the oil generated there
has been trapped or whether it dispersed or evaporated."
Beginni 1986, Conoco, along with Amoco,
Chevron, Phillips and, briefly, Shell all sought and obtained
exploration licenses for northern Somalia from Siad Barre's government.
Somalia was soon carved up into concessional blocs, with Conoco,
Amoco and Chevron winning the right to explore and exploit the
most promising ones.
The companies' interest in Somalia clearly
predated the World Bank study. It was grounded in the findings
of another, highly successful exploration effort by the Texas-based
Hunt Oil Corp. across the Gulf of Aden in the Arabian Peninsula
nation of Yemen, where geologists disclosed in the mid-1980s that
the estimated 1 billion barrels of Yemeni oil reserves were part
of a great underground rift, or valley, that arced into and across
Hunt's Yemeni operation, which is now
yielding nearly 200,000 barrels of oil a day, and its implications
for the entire region were not lost on then-Vice President George
In fact, Bush witnessed it firsthand in
April, 1986, when he officially dedicated Hunt's new $18-million
refinery near the ancient Yemeni town of Marib. In remarks during
the event, Bush emphasized the critical value of supporting U.S.
corporate efforts to develop and safeguard potential oil reserves
in the region.
In his speech, Bush stressed "the
growing strategic importance to the West of developing crude oil
sources in the region away from the Strait of Hormuz," according
to a report three weeks later in the authoritative Middle East
Bush's reference was to the geographical
choke point that controls access to the Persian Gulf and its vast
oil reserves. It came at the end of a 10-day Middle East tour
in which the vice president drew fire for appearing to advocate
higher oil and gasoline prices.
"Throughout the course of his 17,000-mile
trip, Bush suggested continued low (oil) prices would jeopardize
a domestic oil industry 'vital to the national security interests
of the United States,' which was interpreted at home and abroad
as a sign the onetime oil driller from Texas was coming to the
aid of his former associates," United Press International
reported from Washington the day after Bush dedicated Hunt's Yemen
No such criticism accompanied Bush's decision
late last year to send more than 20,000 U.S. troops to Somalia,
widely applauded as a bold and costly step to save an estimated
2 million Somalis from starvation by opening up relief supply
lines and pacifying the famine-struck nation.
But since the U.S. intervention began,
neither the Bush Administration nor any of the oil companies that
had been active in Somalia up until the civil war broke out in
early 1991 have commented publicly on Somalia's potential for
oil and natural gas production. Even in private, veteran oil company
exploration experts played down any possible connection between
the Administration's move into Somalia and the corporate concessions
"In the oil world, Somalia is a fringe
exploration area," said one Conoco executive who asked not
to be named. "They've overexaggerated it," he said of
the geologists' optimism about the prospective oil reserves there.
And as for Washington's motives in Somalia, he brushed aside criticisms
that have been voiced quietly in Mogadishu, saying, "With
America, there is a genuine humanitarian streak in us . . . that
many other countries and cultures cannot understand."
But the same source added that Conoco's
decision to maintain its headquarters in the Somali capital even
after it pulled out the last of its major equipment in the spring
of 1992 was certainly not a humanitarian one. And he confirmed
that the company, which has explored Somalia in three major phases
beginning in 1952, had achieved "very good oil shows"
-- industry terminology for an exploration phase that often precedes
a major discovery -- just before the war broke out.
"We had these very good shows,"
he said. "We were pleased. That's why Conoco stayed on. .
. . The people in Houston are convinced there's oil there."
Indeed, the same Conoco World article
that praised Conoco's general manager in Somalia for his role
in the humanitarian effort quoted Marchand as saying, "We
stayed because of Somalia's potential for the company and to protect
Marchand, a French citizen who came to
Somalia from Chad after a civil war forced Conoco to suspend operations
there, explained the role played by his firm in helping set up
the U.S.-led pacification mission in Mogadishu.
"When the State Department asked
Conoco management for assistance, I was glad to use the company's
influence in Somalia for the success of this mission," he
said in the magazine article. "I just treated it like a company
operation -- like moving a rig. I did it for this operation because
the (U.S.) officials weren't familiar with the environment."
Marchand and his company were clearly
familiar with the anarchy into which Somalia has descended over
the past two years -- a nation with no functioning government,
no utilities and few roads, a place ruled loosely by regional
Of the four U.S. companies holding the
Siad Barre-era oil concessions, Conoco is believed to be the only
one that negotiated what spokesman Geybauer called "a standstill
agreement" with an interim government set up by one of Mogadishu's
two principal warlords, Ali Mahdi Mohamed. Industry sources said
the other U.S. companies with contracts in Somalia cited "force
majeure" (superior power), a legal term asserting that they
were forced by the war to abandon their exploration efforts and
would return as soon as peace is restored.
"It's going to be very interesting
to see whether these agreements are still good," said Mohamed
Jirdeh, a prominent Somali businessman in Mogadishu who is familiar
with the oil-concession agreements. "Whatever Siad did, all
those records and contracts, all disappeared after he fled. .
. . And this period has brought with it a deep change of our society.
"Our country is now very weak, and,
of course, the American oil companies are very strong. This has
to be handled very diplomatically, and I think the American government
must move out of the oil business, or at least make clear that
there is a definite line separating the two, if they want to maintain
a long-term relationship here."