Uncovering Shell Oil’s New Interest in Exploring Puntland

Just when Puntland’s dreams of oil seemed to be fading, new information has surfaced about Royal Dutch Shell reentering Somalia, and Dissident Nation has been given an exclusive insight into the future of the oil exploration program in Puntland.

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Dissident Nation has been provided a map which highlights the area of particular interest for the Shell corporation, known as the M-5 offshore block, located just beyond the shores of the Nugaal Valley Basin. The area is 27,000 sq. km. total and covers the entire coastal territory of the Nugaal province. (Click on the map to enlarge it).

The map is dated March 20, 2012, roughly a month after the London Conference on Somalia, and it acknowledges the presence of Range Resources in the Nugaal offshore program, despite Shell’s previous acquisition of the same piece of acreage. The map demonstrates Shell’s knowledge of the current situation in Puntland, and the closeness with which it is following the developments in the fledgling Somali federal state.

Amid attempts by Somalia’s new government to create frictions between old and new oil interests in Puntland, we’ve been told that all parties involved in the process will reach a pragmatic solution.

Hints from Range Resources

Aside from Shell, Range Resources is still very interested in its Puntland assets. The sealing of both wells in the Dharoor drilling phase earlier this year did not wane Range’s resolve to remain in Puntland, even as their joint venture partners expressed the lack of funds to continue in the region.

Range, now with sole rights to drill both the onshore and offshore Nugaal blocks, may be looking for a new friend, and Shell has been looking right back at the small West Perth-based exploration company.

History of Shell in Puntland

Royal Dutch Shell first entered the area now known as Puntland in the late 1980s. The Shell subsidiary Pecten was given rights to explore Nugaal’s offshore blocks in 1988, adjacent to onshore acreage owned by Conoco Inc. (now ConocoPhillips), which was running the most aggressive exploration program in the Horn of Africa. Pecten’s concessions are marked as M-4 and M-5 on the posted map, though labeled under Shell’s name (with direct acknowledgment of Range activity).

Currently, Shell, along with BP, Maersk, and the shipping industry of Japan, are engaged in a multi-year non-profit program aimed at building livelihoods in Somali coastal communities which have been afflected by piracy. Many of these coastal towns and villages lie within Shell’s former concession areas in Puntland.

In February of this year, Dissident Nation reported a story about Puntland officials engaged in offshore oil talks with British-based “supermajors.” At the time, BP’s name was being commonly thrown out by the media, but we leaned more towards the Puntland-Shell relationship, which had a history of its own.

When Shell acquired the Indian Ocean rights for its Pecten subsidiary, it also obtained rights under the Shell name to a large strip of coast which now covers Puntland’s entire Gulf of Aden territory. We had a hunch in the late winter, the same time frame as our anonymously-obtained map, that Shell sought to reenter Somalia to resume activities on one of its former offshore concessions.

Political developments

Since September of this year, President Abdirahman Farole of Puntland has been touring his state to strengthen ties and bolster security. Most of his tour has been relegated to the Nugaal province until now.

Farole and a high-level state delegation met yesterday in the southern Nugaal village of Jalam with the governors of Mudug and Nugaal, as well as traditional elders from Jalam. While the village lies just outside of Farole’s clan base, it is the stronghold of Mohamed Yusuf Jama’s sub-clan, the Mudug governor appointed by Farole, who also serves as the gatekeeper for Puntland’s southern border. After a customary dinner in the outskirts of town, Farole addressed the primary needs of the village, whose entire outlying district used to be outside of the president’s core agenda.

This spontaneous campaign of traditional diplomacy between Farole and the disaffected communities of Nugaal is reminiscent of similar activities he conducted during the months surrounding the Dharoor Valley drilling program.

In the coming weeks, Dissident Nation will continue to unveil the ongoing relationship between Shell, Range Resources, and the government of Puntland.

{DN Staff Writers}

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