There is a conflict looming in the horizon as the company moves the seismic work to the east in areas where Khaatumo insurgents are actively operating. Besides, the same area is claimed to be owned by Puntland. Recently the Vice-President of Puntland was visiting Eastern Somaliland (say Khaatumo or Puntland). So it became compulsory for Genel to decide now rather than late before the company submerges into the foreseen conflict.
The Turkish and the British governments are actively supporting the Federal Government of Somalia and therefore they may have warned Genel Energy of the visible conflict emerging in the horizon if Genel continues with its programme.
Genel Energy excluded the Federal Government of Somalia (FGS) during the signing of the production sharing agreement with Somaliland in August and November 2012. They followed the same approach as the Kurdistan Region of North Iraq. The FGS was not happy with this attitude and it may have pressurised the company using the British and the Turkish governments.
Genel may be citing “Security” as a ground for “force majeure” and may be coming later when the conditions on the ground is sound enough to continue to work.
There are other basins, equally potential or even with higher prospects in Somalia where Genel Energy can go into without conflicts of ownership. Those petroleum basins are located in the South from Puntland to Ras Kambooni on the Kenyan border.
It is evident that Somaliland has lost a great opportunity in tapping its resources and it has to learn lessons from the disruptions caused by the locals and the security turmoil that occurred in the job sites. In the future, any oil deal should start from the grassroots: discussions with the indigenous people and their traditional leadersand then the deal should move to the regional authorities including all the stakeholders and lastly the production sharing agreement should be signed with the Federal Government of Somalia in the presence of the regional and self-governments (The Lands). This is the right way to proceed in developing the oil and gas resources of Somalia whether in Somaliland, Puntland, Juba or elsewhere in the Somali regions.
Yes regions. For those who argue recognition isn't needed for a healthy economy and legitimacy just read these points again. 5 Somali regions question you're legitimacy which led to this. The world is watching.
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http://somalicurrent.com/why-did-genel-energy-exit-from-somaliland/
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