Somalia Considering Opening Up Oil Exploration To Foreign Firms

Several foreign oil companies are seeking permission to resume the search for oil.

The Somali parliament is debating a new oil law that would pave the way for the government to offer exploration licenses to foreign firms. Somalia's ambassador to Kenya Mohamed Ali Nur said the law would also see the formation of a national oil firm in the country, which is believed to have hydrocarbon reserves.

"The law is going to be debated today or tomorrow ... I believe that after the debate it will be passed," Nur said.

He denied a report last month in The Financial Times newspaper that Somalia had struck oil exploration contracts with Chinese oil firms.

The Horn of Africa nation has attracted several foreign oil companies, which are seeking permission to resume the search for oil. Somalia sank into chaos in 1991 when dictator Mohamed Siad Barre was ousted. Before then, geological exploration had suggested that Somalia might have significant oil and natural gas, given its proximity to the oil-rich Red Sea and Gulf of Aden. In the final years of Barre's rule, the northern Puntland region was carved into blocs for American oil giants: Amoco, Chevron, Conoco and Phillips -- the two later merged into Conoco-Phillips. But serious exploration was prevented when civil war engulfed the whole nation.

Copyright Agence France-Presse, 2007

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