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Somali Officials Deny Selling Oil Rights

Officials with Somalia's transitional government are promising not to begin searching for oil until after parliament adopts a new petroleum law and their shattered country achieves peace. But as Nick Wadhams reports from Nairobi, new evidence suggests they are looking to carve up oil rights.

Last month, the Financial Times reported that President Abdullahi Yusuf had awarded Prime Minister Gedi and his staff are promising not to sign any deals until a natural resources law is enacted. Parliament is scheduled to consider the bill this week.

Somalia's ambassador to Kenya, Mohamed Ali Nur, denies there is a split within the Somali government. He tells VOA that officials understand peace must come to the turbulent country before exploration begins.

"I do not believe that any deals have been signed and even the one by the Chinese company I think the prime minister gave an interview to a news agency saying that it is annulled and he was not aware of it and nothing can be signed until the law is passed," said Nur. "The reports that we have been getting from different sources is that we have a lot of resources we can explore, but peace should come first."

The priority that officials are putting on oil, despite Somalia's turbulence, is another sign that many African leaders are looking to oil to jump-start their economies.

Neighboring Ethiopia's battle with a rebel group in the east is believed to be partly the result of its desire to protect what it believes are natural resources there. The rebel group, the Ogaden National Liberation Front, has warned oil companies to stay away, and killed 74 people in a raid on a Chinese-run oil facility in April.

Oil experts say the previous estimates about Somalia's small reserves are based on outdated technology. Dianne Sutherland, the editor of Petroleum Africa magazine, says Somali officials have quietly been laying the groundwork for a potential oil boom.

"Until they actually get in there and start utilizing this new technology to have a new look, you do not really know. Oil exploration will definitely get underway in Somalia. 'When?', is the question. They have already signed quite a few contracts with various smaller independent exploration companies," said Sutherland.

Any new concessions will no doubt raise questions for the companies that had exploration rights in Somalia before the 1991 civil war began.