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Range
Resources Confirms its Exploration Activity in Puntland Somalia
03-27-2008
• Rig Mobilisation commences for
Africa Oil Corp’s Drilling Program
• Seismic Program to commence in April on Dharoor Block in Puntland
• Puntland Government passes new legislation with key policy initiatives and
clarity on TFG relationship
Exploration Update
Puntland focussed Australian oil and gas company Range Resources Limited (ASX:
RRS, AIM: RRL), together with its joint venture partner TSX listed Africa Oil
Corporation (“Africa Oil”), are closing in on one of the most important
milestones for both the company and the region – with the spudding of the first
well in Puntland for over 17 years.
Further to previous company announcements in relation to mobilisation of
drilling equipment and a timetable for well spudding, Range confirms that 12
containers of casing and camp construction equipment are en route to Bosasso
port from Jebalali (UAE) via Djibouti as Range’s joint venture partner Africa
Oil Corporation increases its exploration activity on the ground in Puntland.
The drilling contactors and Africa Oil’s drilling manager recently visited the
proposed well sites in Puntland and Africa Oil have confirmed that they are
still on target to spud the first well in early of July 2008. In addition Africa
Oil has finalised the contract with IMC-Tesla for the completion of
approximately 2,600km of 2D seismic in the northern Dharoor Block. The seismic
contractors have visited the Dharoor valley and completed an initial
reconnaissance of the area it is expected that a seismic crew will be on the
ground before the end of March with seismic work commencing in April 2008.
New Mineral and Petroleum Resources and
Development Act
The Puntland Parliament passed a
new Act designed to assist in encouraging additional participants in the
exploration and development of Puntland’s natural resources. A summary of the
Act is set out below. Of critical importance is the fact that the introduction
of the Act does not materially impact on Range’s (and Africa Oil’s) existing
legislative agreements with the Government and Parliament of Puntland – the
agreements (which are separate Acts of Parliament) are upheld and incorporated
by way of transitional provisions under the new Act.
The Act underlines that, all minerals and petroleum resources existing in
Puntland in their natural form are owned by the State of Puntland, being held in
trust by the Government of Puntland on behalf of the community. As such, the
management and administration of mineral and petroleum exploration and
development in Puntland is the primary responsibility of the Minister of Energy
and Minerals and the Licensing Authority empowered by this Act. The system also
provides security of access to resources essential for large capital investments
which are required for development to occur.
Of note under the Act, the Government of Puntland will cooperate with the
Transitional Federal Government and together they will formulate strategic
policies to develop the mineral and petroleum wealth of Somalia in a way that
achieves the highest benefit to the people of Somalia. The Government of
Puntland will share revenues received under the Act with the Transitional
Federal Government pursuant to agreements reached between both parties as to the
percentage of shared revenues. The Government of Puntland will also cooperate
with the Transitional Federal Government to develop and restructure the minerals
and petroleum industry of Somalia.
Puntland Government Policy Statement
The Government through His Excellency, President Hersi also presented and
released a significant policy statement which deals with 3 essential points:
i. to save Puntland territory and waters from the hostilities created by the
absence of central government and confrontations of political factions serving
negative interests;
ii. to be part of the pursuit to restore a Somali central authority based on a
federal system, the only system that would prevent totalitarianism and
dismemberment; and
iii. to cooperate with the international community to find a solution to the
Somali crisis in general and to support the reconstruction and development in
Puntland in particular.
A key feature of the policy statement is that “Until such time as an all
inclusive federal constitution is effected and state governments, convinced with
the sharing of power and resources, are instituted, Puntland’s support of the
TFG should not be interpreted in any manner that Puntland is part of the TFG –
Puntland shall remain independent for its laws, policies and interests.”
With the exploration effort substantially increasing over the next few months,
observers will have noticed an increasing number of conflicting articles and
speculation on various websites relating to the situation in Puntland and the
activities of Range and Africa Oil. The launching of the Puntland Government
website is designed to provide shareholders, potential investors and observers
with an accurate picture of activities in Puntland and the Government’s
relationship with various stakeholders.
By way of example Range has been informed by the Puntland Government that an
open letter posted by the TFG Energy Minister over the Easter weekend was not
authorised or approved by either the President or Prime Minister of the TFG.
There will always be certain minority groups trying to destabilise the current
Puntland Government given the fractured state of certain parts of Somalia and
the fact that exploration success in the coming year will obviously assist the
Government and current sitting members as Puntland moves into elections in early
2009. The attempted destabilisation has increased over the last few weeks given
the clarity on where the exploration efforts of Range and Africa Oil are headed
over the coming months.
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