20120118
AFP
Drilling has begun on the first oil well in war-torn Somalia in 20 years, as Canada's Horn Petroleum Corp. broke ground on an exploratory site in the breakaway region of Puntland, officials said Tuesday.

In a statement received Tuesday, the company said it is "pleased to announce the spudding of the Shabeel-1 well on the Dharoor Block in Puntland, Somalia... operations have also commenced on the Shabeel North-1 well."

Puntland President Abdirahman Mohamed Farole in a ceremony Monday said the well drilling was "a big day for the people of Puntland and Somalia in general."

"We will be no longer begging people for resources after the drilling of the oil wells," he said.

"Our young educated men and women will not suffer unemployment, everyone including ordinary labourers will have their opportunity."

Security was tight at the site, with hundreds of heavily armed troops deployed to protect the petroleum operations, officials said.

The United Nations says Somalia is the world's worst humanitarian crisis, while regional armies and the Western-backed government are fighting Al-Qaeda linked insurgents in the south. However, security is better in northern regions.

Horn, a unit of Africa Oil Inc. has a 60 percent stake in -- and is operator on -- the Dharoor and Nugaal blocks in semi-autonomous Puntland.

The other partners on the Dharoor block are Range Resources Ltd. and Red Emperor Resources NL, both of Australia, each with a 20 percent interest.

"Somalia, and in particular Puntland, remain one of the last under-explored countries that have high potential for vast reserves of hydrocarbons," Range Resources said in a statement.

The company said Somalia was divided up in the late 1980s into a number of oil exploration concessions, but that exploration ceased with the start of the still-raging civil war in 1991.

It noted a World Bank coordinated study aimed at encouraging private investment in the oil potential of eight African nations put Somalia and Sudan, at the time still a unified nation, at the top of the list of potential commercial oil producers.

Africa Oil is a Vancouver, BC-based hydrocarbons exploration company that also has interests in exploration licenses in Kenya, Ethiopia and Mali.

Red Emperor Resources has interests in Georgia as well as in Puntland.