Sustenance may mean profits 4 Oil firms have a stake in a stable, healthy Somalia

January 18, 1993|By Los Angeles Times

MOGADISHU, Somalia -- Far beneath the surface of the tragic drama of Somalia, four major U.S. oil companies are sitting on a prospective fortune in exclusive concessions to explore and exploit tens of millions of acres of the Somali countryside.

That land, in the opinion of geologists and industry sources, could yield significant amounts of oil and natural gas if the U.S.-led military mission can restore peace to the impoverished NTC East African nation.

According to documents obtained by the Los Angeles Times, nearly two-thirds of Somalia was allocated to the American oil giants Conoco, Amoco, Chevron and Phillips in the final years before Somalia's pro-U.S. President Mohamed Siad Barre was overthrown and the nation plunged into chaos in January 1991.

Industry sources said the companies holding the rights to the most promising concessions are hoping that the Bush administration's decision to send U.S. troops to safeguard aid shipments to Somalia also will help protect their multimillion-dollar investments there.

Officially, the administration and the State Department insist that the U.S. military mission in Somalia is strictly humanitarian. Oil industry spokesmen dismissed as "absurd" and "nonsense" allegations by aid experts, veteran East Africa analysts and several prominent Somalis that President Bush, a former Texas oilman, was moved to act in Somalia at least in part by the U.S. corporate oil stake.

But corporate and scientific documents disclose that the American companies are well-positioned to pursue Somalia's most promising potential oil reserves the moment the nation is pacified. And the State Department and U.S. military officials acknowledge that one of those oil companies has done more than simply sit back and hope for peace.

Conoco Inc., the only major multinational corporation to maintain a functioning office in Mogadishu throughout the past two years of nationwide anarchy, has been directly involved in the U.S. government's role in the U.N.-sponsored humanitarian military effort.

Conoco, whose tireless exploration efforts in north-central Somalia reportedly had yielded the most encouraging prospects just before Siad Barre's fall, permitted its Mogadishu corporate compound to be transformed into a de facto American embassy a few days before the U.S. Marines landed in the capital, with Mr. Bush's special envoy using it as his temporary headquarters. In addition, the president of the company's subsidiary in Somalia won high official praise for serving as the government's volunteer "facilitator" during the months before and during the U.S. intervention.

Describing the arrangement as "a business relationship," John Geybauer, spokesman for Conoco Oil in Houston, said the company was acting as "a good corporate citizen and neighbor" in granting the U.S. government's request to be allowed to rent the compound.

But the close relationship between Conoco and the U.S. intervention force has left many Somalis and foreign development experts deeply troubled by the blurred line between the U.S. government and the large oil company, leading many to liken the Somalia operation to a miniature version of Operation Desert Storm, the U.S.-led military effort in January 1991 to drive Iraq from Kuwait and, more broadly, safeguard the world's largest oil reserves.

Although most oil experts outside Somalia laugh at the suggestion that the nation ever could rank among the world's major oil producers -- no one doubts that there is oil in Somalia. The only question: How much?

"It's there. There's no doubt there's oil there," said Thomas E. O'Connor, the principal petroleum engineer for the World Bank who headed an in-depth, three-year study of oil prospects in the Gulf of Aden off Somalia's northern coast.

The companies' interest in Somalia clearly pre-dated the World Bank study. It was grounded in the findings of another, highly successful exploration effort by the Texas-based Hunt Oil Corp. across the Gulf of Aden in Yemen.

Hunt's Yemeni operation, which is now yielding nearly 200,000 barrels of oil a day, and their implications for the entire region were not lost on then-Vice President Bush. In fact, Mr. Bush witnessed it first-hand in April 1986, when he officially dedicated Hunt's new $18 million refinery near the ancient Yemeni town of Marib. In remarks during the event, Mr. Bush emphasized the critical value of supporting U.S. corporate efforts to develop and safeguard potential oil reserves in the region.

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