The Placing comprises of two tranches; the First Tranche being 16,194,013 new ordinary shares and the Second Tranche being 22,278,191 new ordinary shares. The Company reserves the right to place up to an additional 7,000,000 new ordinary shares as over subscriptions to Australian shareholders to the Second Tranche. It is expected that admission to trading on AIM will become effective for the First Tranche on or about 1 March 2012. Application has today been made for admission of the First Tranche Placing Shares to trading on AIM.

The Second Tranche is subject to shareholder approval at a forthcoming Extraordinary General Meeting. The Notice for this meeting is expected to be published shortly. It is expected that admission will become effective for the Second Tranche on or about 2 April 2012.

The funds raised under the Placing will be used to progress the Company’s exploration drilling activities in Puntland and Georgia, business development opportunities and working capital.

Following admission of the First Tranche, the Company will have 205,845,393 ordinary shares on issue. The Company holds no shares in treasury and each share carries one vote. This figure may be used by shareholders in the Company as the denominator for calculations by which they will determine if they are required to notify their interest in, or a change to their interest, under the Disclosure and Transparency Rules.

Source: Emperor Resources

Abdulkadir Abdi Hashi, minister for international cooperation in the state of Puntland

Britain is involved in a secret high-stakes dash for oil in Somalia, with the government offering humanitarian aid and security assistance in the hope of a stake in the beleaguered country’s future energy industry.

Riven by two decades of conflict that have seen the emergence of a dangerous Islamic insurgency, Somalia is routinely described as the world’s most comprehensively “failed” state, as well as one of its poorest. Its coastline has become a haven for pirates preying on international shipping in the Indian Ocean.

David Cameron last week hosted an international conference on Somalia, pledging more aid, financial help and measures to tackle terrorism. The summit followed a surprise visit by the foreign secretary, William Hague, to Mogadishu, the Somali capital, where he talked about “the beginnings of an opportunity” to rebuild the country.

The Observer can reveal that, away from the public focus of last week’s summit, talks are going on between British officials and Somali counterparts over exploiting oil reserves that have been explored in the arid north-eastern region of the country. Abdulkadir Abdi Hashi, minister for international cooperation in Puntland, north-east Somalia – where the first oil is expected to be extracted next month – said: “We have spoken to a number of UK officials, some have offered to help us with the future management of oil revenues. They will help us build our capacity to maximise future earnings from the oil industry.”

British involvement in the future Somali oil industry would be a boon for the UK economy and comes at a time when the world is increasingly concerned about the actions of Iran, the second-biggest oil producer in Opec.

Hashi, in charge of brokering deals for the region’s oil reserves, also said Somalia was looking to BP as the partner they wanted to “help us explore and build our oil capacity”. He added: “We need those with the necessary technical knowhow, we plan to talk to BP at the right time.”

Somali prime minister Abdiweli Mohamed Ali said his government had little choice but to entice western companies to Somalia by offering a slice of the country’s natural resources, which include oil, gas and large reserves of uranium. “The only way we can pay [western companies] is to pay them in kind, we can pay with natural resources at the fair market value.”

Britain is not the only country looking to develop Somalia’s vast natural resources. Last month oil exploration began in Puntland by the Canadian company Africa Oil, the first drilling in Somalia for 21 years. Hashi, who sealed the Africa Oil deal, said the first oil was expected to be extracted within the next “20 to 30 days”.

The company estimates there could be up to 4bn barrels (about $500bn worth at today’s prices) in its two drilling plots. Other surveys indicate that Puntland province alone has the potential to yield 10bn barrels, placing it among the top 20 countries holding oil. Chinese and US firms are among those understood to have also voiced interest about the potential for oil now that, for the first time in 20 years, the country is safe enough to drill.

Yet it is the extent of oil deposits beneath the Indian Ocean that is most exciting Somali officials. One said the potential was comparable to that of Kuwait, which has more than 100bn barrels of proven oil reserves. If true, the deposits would eclipse Nigeria’s reserves – 37.2bn barrels – and make Somalia the seventh largest oil-rich nation.

The state-owned China National Offshore Oil Corporation has tried to acquire an interest in Somalia’s reserves. Senior officials from the Somali transitional government are adamant that the imminent extraction of oil in Puntland next month would kickstart a scramble from the multinationals.

On Thursday, the last day of the London conference, BP and Shell unveiled an initiative to support job-creation projects in the coastal regions of Somalia. A subsidiary of Shell was thought to have acquired exploration concessions in Puntland before the descent into lawlessness in 1991.

A BP spokesman said there were “no plans” to work in Somalia and no official had recently visited the country.

Source:  Observer
Photo: Raxanreeb

They expect the oil to flow within weeks. Coming from two miles underground, the crude should reach the arid plains of Puntland in the north-east corner of Somalia by April.

Around the same time, Somali diplomats say an offensive against al-Shabaab militia in the south of the country, backed by US drone strikes, should have damaged the Islamist group’s “effective fighting capability”.

Meanwhile, the UN plans to impose trade sanctions on the illicit international trade in charcoal, Somalia’s “black gold” which not only funds al-Shabaab but also destroys the country’s forests and led in part to last year’s widespread famine.

The promise of stability coupled with the apparent discovery of oil reserves could help to rebuild this poverty-stricken country. But experts warn the west must not pillage the newly found resources of Somalia, or risk massively escalating the conflicts already in the region. Kenyan, Ethiopian and Ugandan soldiers are in Somalia fighting al-Shabaab and each country has vested interests in Somalia’s future. Already a new militia, led by the unlikely-sounding Sheik Atom, has formed around Puntland’s oilfields.

The Somali prime minister, Abdiweli Mohamed Ali, speaking to the Observer after meeting Hillary Clinton and David Cameron at the London Somalia Conference last week, said that in the future a share of natural resources would be offered in return for help with reconstruction. “There’s room for everybody when this country gets back on its feet and is ready for investment,” he said. “Although now is not the time.

“What we need is capital from countries like the UK to invest. If the private sector can come in and do the work, then we welcome them.”

But many observers are uneasy about foreign interference in a country still emerging from 21 years of civil war and facing political transition. The mandate for Somalia’s transitional government runs out in August.

Chatham House analyst Adjoa Anyimadu said: “There’s already a lot of scepticism from parts of the Somalian community about the reasons for the sudden focus on Somalia and the reasons behind the UK’s interest.

“The potential for things to go wrong is high, for the population to feel they are being undermined or invaded by foreigners. Al-Shabaab has little credence with many Somalians but a foreign intervention could create a common enemy.”

While a new wealth could bring back the diaspora, she said, they too would need to be wary about riding roughshod over respected clan structures. “There are big gulfs between the experiences of those educated abroad and those living in Somalia. Everyone has a duty to make sure the population really does get a say in establishing governance so that it is seen as legitimate. The pressing issue remains food and security.”

Mark Bradbury, director of the Rift Valley Institute and author of several reports on Somalia, said oil was “a big game changer”. He added: “The international community has been very quiet on the whole exploitation of minerals and hydrocarbons. There is clearly potential for dispute between the relatively stable Puntland and the rest of the country. The positive end would be a federal government put in place with international support; the negative, a Somalia being divided up by international military forces.”

Markets expert Stuart Joyner, of Investec Securities in London, warned against the Somalis getting too carried away with the oil discoveries.

“Somalia obviously has oil potential because it’s very close to some of the big east Africa finds and people are looking for more. It’s a very poor country so it’s going to help them, but in the global oil industry it’s nowhere.

“I’d be flabbergasted if the Puntland fields were worth the time of the big players such as BP or Shell. It will be more private investors.”

So the real corporate goal may well be not what is due to arrive on the surface next month but what is known to be under the Indian Ocean off Somalia’s coast – where sovereignty is unclear.

Drilling in Puntland by the Canadian firm Africa Oil began last month and transitional government officials, in London for David Cameron’s conference, said pipelines to the country’s ports had been laid.

Civil war, insecurity and lack of infrastructure ensured that the region became a no-go for western companies from the early 1990s when the government collapsed, leaving local warlords and militias to claw out territories.

For Americans, Somalia still holds the painful memory of the “Black Hawk Down” incident of 1993 when 18 members of a US helicopter assault force and an estimated 700 Somalis were killed in a battle in Mogadishu. A senior Somali delegate in London last week said creating the conditions for stability was essential. “If citizens of Britain are kidnapped, then that will interfere with progress.”

Dahabo Isse, from Mogadishu, and a prominent member of London’s Somali community, is among those concerned at the prospect of western multinationals profiting from their resources. “If resources go to the people, then fine, but if they take most of the oil money outside it is a worry.”

Source: The guardian 

Photo: Raxanreeb