Somalia: The Chinese Move in or Do They?

Yesterday it was reported that the Chinese had struck a deal to explore for oil in Somalia. Today, Somalia’s interim prime minister has said he is not aware of any deal being struck.

Ali Mohamed Gedi’s comments are being interpreted as signalling a potential internal power struggle within the Somali government.

‘I’m not aware of this,’ Gedi said of the reported agreement between the government and oil companies, China National Offshore Oil Corporation (CNOOC) and China International Oil and Gas (CIOG). ‘I don’t know anything about it.’

It is also alleged that Somalia’s energy minister met with officials from the two companies last month, with an official record of the meeting reading: ‘The TFG (Transitional Federal Government) has and will continue to authorisz CNOOC and CIOG to exercise their contract without any interruption during and after the effectiveness of the new national oil law.’

Gedi said that no valid oil deals could be struck until the new oil law was endorsed by Somalia’s interim parliament. ‘There are many companies interested in exploring oil and gas in Somalia, but in order to protect the wealth of the country and the interests of the Somali people, we cannot operate without a regulatory body, without rules and regulations’.

Two issues are worth noting. Firstly that PSAs are the cause of all the problems over Iraq’s oil. Secondly this is further evidence of the Chinese trying to buy up African oil assets, especially in countries were Western oil companies are reluctant to go.