Somalia, Trading in Oil and Piracy

Connecting the Red Sea to the Mediterranean, Senausert III, Pharaoh of Egypt created the first canal across his land in 1874 B.C. From Antiquity ships bearing the wealth of Asia have passed the Horn of Africa on their way to Europe. Pirates have preyed on these vessels on and off over the ages. Recent developments in Somalia may be a blessing or curse for international commerce as the nation enters a new age of exploration. A Nation in Turmoil Kenya, Ethiopia and Somalia comprise the land area commonly called the Horn. Territorial rivalry between tribal clans has allowed the region to remain lawless for decades. In 1960 after Somaliland’s emancipation from British rule, Italian Somalia began to look at ways to unify its country. It wasn’t until 1991 when a unified Somalia was able to declare its full independence under president elect Mohamed Siad Barre. At that time American and European oil interests began looking at the region for potential assets. President Barre seeing oil as a way to stabilize his government was ready to grant concessions to the West. The fledgling government however plagued by corruption wasn’t strong enough to hold the country together. Black Gold and the Red Sea

Some geologists have long believed the Horn of Africa could hold a major oil and gas field with Somalia at its center. Others recognized that the risks might not out way the rewards. Unsure of the strength of Somalia’s oil resource and the country’s instability in the 90’s the oil industry abandoned plans for development. Impoverished by civil war Somalia lapsed into 20 years of national dysfunction once again permitting warlords to profit from hijacking ships, which passed through the strait of Bab al-Mandab on their way up the Red Sea to the Suez Canal. The new age of piracy had begun. The Strait is divided by the island of Perim into two channels. Bab Iskender or Alexander’s Strait is only 2 miles wide while the Dact-el-Mayun channel is approximately 16 miles wide with a depth of 170 fathoms. It is the better navigational choice for modern commercial traffic. However, it is a choke point between the Gulf of Aden and the Red Sea, which pirates have used to their advantage. New seismographic surveys released last year indicate a potential windfall of oil and gas deposits in the Gulf between Kenya and Somalia. Some experts claim that based on these new initial findings Somalia could be the next Oil Super Power. Oil exploration and recovery will certainly bring more tanker traffic to the region. These same tankers will then transit the Red Sea and Suez Canal to deliver their product to Europe. The Nation of Somalia Rises Again

Elected in 2012 Hassan Sheikh Mohamud founder and chairman of the Peace and Development Party was named by Time Magazine as one of the Top 100 most influential persons in the World. President Mohamud has been engaged in unifying the nation and countering the insurgence of Islamic extremism. Al-Qaeda-backed Al Shabaab, routed out of Somalia over the last few years, took up a stronghold in neighboring Kenya. It’s no secret that they have promoted acts of piracy in the Gulf of Aden and Red Sea. It is only through the intervention of private security and naval escort that the rate of hijackings has been curtailed in the last few years. As the Mohamud government seeks continued stabilization, will the promise of new oil wealth bring new challenges to regional shipping? Oil Assets: a Blessing or a Curse

Somalia is still a nation heavily influenced by local clan leaders. The same leaders that place thumbs up or down on piracy as a way of supporting their people. Oil revenues could reshape Somalia’s economy, bringing its citizens out of the sub-poverty level. With the blessing of local leaders the economy could move forward without resorting to hijacking ships. Then again, oil rigs and increased tanker traffic make enticing targets. Kenya continues to fight the re-emergence of Al-Qaeda within its borders so it will be incumbent on both Somalia and Kenya to root out Islamic extremism in the region. While both governments’ stake respective claims over mineral deposits, each is going forward with individual offers for drilling rights to foreign investors. Cross claims brought before the U.N. International Court of Justice could flame tension between the countries. In spite of that, earlier this month Somali officials announced the first round of licensing concessions at an oil conference in Cape Town, S.A. Initial agreements will cover the area off center and southern Somalia. General elections scheduled for this October and November have been suspended. President Mohamud and his cabinet claim the country is still not stable enough for a vote. Al Shabaab continues to plague their borders and an established government is required to move forward with oil exploration and extraction. Will this be seen as a move toward oligarchy? The future of Somalia, its stability and economic development rest on future elections and oil development. Will warring clans backed by radical Islam see this riff in the government and the possibility of increased shipping as too ripe a target to avoid?