Mar 22, 2012 – Lots of crude is a major incentive, but al-Qaeda presence a serious drawback in Puntland. The prospect of plentiful crude oil has lured one Canadian company to northern Somalia’s hard-to-reach desert—and al-Qaeda isn’t happy about it. Bloomberg reported that Vancouver-based Africa Oil Corp.
plans to invest $50 million to drill two wells in northern Somalia’s semi-autonomous Puntland region, which is home to the al-Qaeda-linked al-Shabaab militia. The first well, to be completed in March, will be the first drilled in Somalia in more than 20 years.
Africa Oil predicts the Dharoor Block in Puntland holds a bounty of over one billion barrels of oil, but the risks are equally large.
An al-Shabaab Twitter post cited by Reuters rejects the intrusion of Western companies and warns of potential local threats: “Western companies must be fully aware that all exploration rights and drilling contracts in N. Eastern Somalia are now permanently nulliﬁed.” Africa Oil CEO Keith Hill acknowedged that there are “significant” security costs and insurance premiums for operating in war-torn Somalia. Still, given the insatiable global thirst for crude, Hill says the rarity of a “billion-barrel oil field” is a risk worth the reward.