Western commercial oil exploration in disputed areas of Somalia and discrepancies over which authorities can issue licenses to companies could spark further conflict in the African nation, U.N. monitors warned in a confidential report.
In the U.N. Monitoring Group's latest annual report to the Security Council's sanctions committee on Somalia and Eritrea, the experts said the Somali constitution gives considerable autonomy to regional governments to enter commercial oil deals.
But a petroleum law that has not yet been adopted by the country's parliament but is being invoked by federal officials in the capital Mogadishu says that the central government can distribute natural resources.
"These inconsistencies, unless resolved, may lead to increased political conflict between federal and regional governments that risk exacerbating clan divisions and therefore threaten peace and security," the experts group said in an annex to its annual report, which was seen by Reuters.
The overthrow of a dictator in 1991 plunged Somalia into two decades of violent turmoil, first at the hands of clan warlords and then Islamist militants, while two semi-autonomous regions - Puntland and Somaliland - have cropped up in northern Somalia.
Around a dozen companies, including many multinational oil and gas majors, had licenses to explore Somalia before 1991, but since then Somaliland and Puntland and other regional authorities have granted their own licenses for the same blocks.
In some cases Somaliland and Puntland have awarded licenses for blocks that overlap. The experts said one such case involves Norwegian oil firm DNO (DNO.OL) and Canadian-listed Africa Oil Corp (AOI.V).
"Potentially, it means that exploration operations in these blocks, conducted by both DNO and Africa Oil under the protection of regional security forces, its allied militia or private forces, could generate new conflict between Somaliland and Puntland," the report said.
"It is alarming that regional security forces and armed groups may clash to protect and further Western-based oil companies interests," it said.
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