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Imagine a group of greedy businessmen and their cohorts in a room with utterly incompetent representatives of a government in desperate financial situation. Throw in some cash in the mix and it is very likely that you will end up with something similar to the oil and mining exploration deal Puntland authorities signed with Consort Private, a disturbingly dubious company, with the consent and blessing of the TFG administration. The essence of the deal is as follows: the regional administration of Puntland signed a concession agreement with Consort Private Ltd on August 30, 2005. The agreement gives Consort Private Ltd the sole and exclusive rights to all mineral and oil exploration, as well as development on and offshore in an area of approximately 212,000 square kilometers in Puntland. Consort Private sold 50.1% of their rights to Range Resources Ltd, a small Australian firm, which is trying to raise $3.45 million dollars to fund the deal. The deal was initially opposed by Somalia’s TFG Prime Minister Mr. Geedi who raised strong objections to the agreement in a letter to the Australian Security Exchange (ASX). The letter sparked a worry among investors who heavily traded Range’s shares to the point where the company requested ASX to remove its name from the trading board temporarily. However, in a mysterious turn of events, Mr. Geedi changed his mind shortly after his initial opposition and fully endorsed the deal. To this date, Mr. Geedi has not been forthcoming in explaining the rationale for his sudden change of heart. Having successfully obtained the blessing of Somalia’s TFG Range Resources Ltd announced, on April 21, 2006, that it secured a letter of intent from Korean National Oil Corporation to buy exclusive rights to 75% of the land covered by Range’s concession. If the deal with the Korean company goes through, Range Resources will receive US $10 million signing bonus, more than twice the amount they plan to raise. The Puntland oil and mining deal has been the subject of intensive debate among Somalis and has created tensions, particularly amongst the founding groups of Puntland and its current administration. The government’s action provoked violent confrontations resulting in loss of innocent lives in the areas targeted for initial contract works, specifically Majayahan and Dhalan in Sanaag Region. There are many unanswered questions about this deal:
Is this a good deal for the Somali people? Obviously, we—the authors of this piece—do not think so. Like many Somalis we’re suspicious about the secrecy surrounding this agreement and wanted to know more about it. With some search on internet and help from friends we were able to obtain substantial amount of publicly available documents which shed strong light on many aspects of this deal. These documents include:
Unfortunately, we were unable to get hold of the agreement between Puntland Administration and Consort Private Ltd, but we will continue our effort in that direction. It is ironic that while the TFG and Puntland administrations were covering their tracks with pathetic secrets, their counterparts were making full disclosures of the deal in order to attract investors around world. In the first installment of this two part article, we will present the facts of the deal based on the documents as well as other sources we obtained. In part two, we share more documents and present our take on why this deal is bad for Somalia and for the people of Puntland in particular. Facts of Puntland Oil and Mining Deal: Chronology of Events August 30, 2005: Consort Private, which is believed to be registered in the Maldives and operates through a London law firm, signed a contract with Puntland government at the Hilton Hotel in Dubai. The content of the agreement has not been made public yet. Individuals present at the signing ceremony included Puntland’s President, Mr. Mohamed Muse Hersi and his finance minister both of whom gave speeches on the occasion. Consort Private Ltd was represented by Mr. Anthony Black, a London lawyer who is also the director of the company. President’s speech at the signing ceremony: Finance Minister’s speech at the signing ceremony: We understand that this event, if not stopped on time, will have an impact on Range Resources Ltd and the market of the Australian Stock Exchange and we ask you as a matter of urgency to inform your market of this event."……….. "Any violation against this statement will result in negative consequences and the external and/or internal culprits will take the responsibilities on their shoulders," October 18, 2005: The President of Puntland, Mohamed Muse Hersi reaffirmed Puntland’s commitment to the agreement with Consort Private Ltd in letter to its Director Anthony Black. A copy of the letter is available at this link http://www.rangeresources.com.au/asx/PresidentsLetter.pdf. November 2, 2005: The Prime Minister of Somalia, Mr. Ali Mohamed Geedi mysteriously changed his mind and strongly endorsed the Puntland deal. He did so in a letter to Hassan Dahir Mohamud, the Vice President of Puntland. A copy of Mr. Geedi’s letter is available at http://www.rangeresources.com.au/asx/ April 21, 2006: In a letter filed with Australian Stock Exchange (ASX), Range Resources Ltd announced that it secured a letter of intent from the Korea National Oil Corporation (KNOC) in respect of a 75% farm in to a concession area in the Nugal area comprising a portion of the former Blocks 28 and 29 following key meetings held in the middle east last week. A copy of the letter is available at the link below. http://www.asx.com.au/asxpdf/20060421/pdf/3wdg8d2z322gc.pdf We hope these documents will shed light on the mystery surrounding the Puntland Oil and Mining exploration deal. Omar M. Abdi Salah Fatah
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