1. To analyse the impact Somali State being federal has on oil exploration.
2. To evaluate the strength or lack of strength of institutions in Somalia and the effect this has on upstream.
3. To analyse the lack of stability in the country and the impact this had on the potential for oil and gas upstream.
4. To critically evaluate the role and impact corruption has had on the feasibility and success of oil and gas upstream in Somalia.
The maintenance of the environmental sustainability and socio-economic viability are considered as the most recognised fundamental issues in the operation management of oil and gas industries. It is evident that the association of the ‘upstream’ works creates the fruitful impact on the environment (Urciuoli et al. 2014). However, some of the negative influences are also seen. The negative influence like deterioration of the biological and physical environments is affecting the local populations that lead towards establishing the poor implemented infrastructures (Bridge and Le Billon 2013).
The study indicates the identified and potential challenges faced by the Somalia oil and gas industries while investing to the upstream sectors. The application of the both secondary and the primary researches by using the relevant methodologies will be signifying the subject matter more specifically. The chapter includes the research aim, objectives, questions and the hypothesis that are helpful for completing the research.
It is evident that in the past decade, the oil and gas exploration has initiated the unpredictable growth. By discovering almost four billion barrels of oil in Uganda and Kenya, the oil and gas industries in East Africa have reached to such explosive growth (Balikuddembe and Ardalan 2014). Even, the discovery of similar amount of oil in Mozambique and Tanzania also added more relevancies in achieving the commendable growth (Adam 2015). It is to be noted that the Oil and Gas exploration in Somalia is signifying the noticeable history as a whole. The destruction of the ecosystems caused the negative effects in the human environment (Keil 2014). Moreover, the ministry implemented the enforcements and justified safeguards by eliminating the ratifications.
In the year of 1950, the country faced the first oil and gas exploration. During the time, several foreign firms like Sinclair Oil Corporation and AGIB were trying to evaluate the opportunity of petroleum geology in the nation of East Africa (Reitano and Shaw 2013). Simultaneously, Sinclair Oil Corporation started the drilling of 50 wells in the southern region for different purposes. The company undertook such operation due to the oil production ventures and stratigraphic purposes. The North Eastern region was mostly selected for undertaking such operations, which was continued till the year of 1956 (Ahali and Ackah 2015). However, in the year of 1969, General Mohammad Siad Barre conducted the Scientific Socialism act, which caused the ceasing of oil exploration in Somalia for the next decades. It is to be noted that Nugal uplifts and Somali embayment are considered as the most promising regions for the development of onshore oil and gas (Savitzky and Urry 2015). The identified issues in the federal government are also signifying the emerging risks for the upstream sectors (Garcia 2014). Even some of the geologists admitted that the oil and gas reserves in Somalia are considered as one of the most suggestive environment. In keeping concentration on such aspects, Puntland started the exploration of oil and gas in the year of 2012 (Devine and Severova 2015). However, the instable atmosphere, emergence of corruption, and inadequate institutionalised system in Somalia are the major factors for the identified issues.
The aim of the research is to explore the challenges faced by Somalia oil and gas industry during the initial period of upstream project. Based on this aim, the research objectives will be organised.
Objectives:
The secondary objectives of the study are
To describe the significant impact of the federal state in Somalia oil exploration
To discuss the instability of the country and the negative impact on the upstream sector
To understand the lack of strengths of the Somalia institutes that affect the upstream sector
To critically analyse the effects of corruptions that affect the feasibility maintenance of Somalia oil and gas upstream.
Research Questions
What are roles of federal state in determining the upstream oil exploration in Somalia?
What are the main reasons behind the issues faced in the investment on the upstream sector of Somalia oil and gas industry?
What are the key issues faced by the oil and gas industry in Somalia during the oil exploration?
How the maintenance of the feasibility is affecting the upstream sector of Somalia oil and gas industry?
The major issue found in this subject is the issues associated with the upstream level in Somalia oil and gas industry. The allegations against the corruptions in Somalia oil and gas exploration have become much prominent in the upstream sector. Even though the explosive rise in the oil and gas sector has been foreseen, the issues with the natural resources still remained (Affi, Elmi and Mohamed 2015). The issues associated with the resource curse and the excessive piracy is determining the bad reputation of the company. Other regions of oil and gas have been facing the potential risks regarding the security issues while dealing with Somalia oil and gas industries (Garcia 2014). Moreover, the improper structure of the political scenario, civil war, and ineffective federal society has been bringing the most prominent issues for this region (Bruni 2014). The lack of proper maintenance in the parliamentary government has been specifying the hazardous situation in the upstream level of oil and gas exploration in Somalia.
Since, there was no previous research conducted in the Somalia oil and gas industry, the research area has been much interesting. Moreover, it is important to analyse the key areas, which is creating the negative impact on the upstream level of the Somalia oil and gas industry. The research study will be exploring the major areas that cause the resource curse. Hence, the research study has the significance in discussing the issues associated with upstream level of the oil and gas industry in Somalia. The study will also reveal the scenario of the country during the emergence of federalism. The recognition of such scenario will also be helpful for understanding the key issues associated in this research.
The structure of the study is as follows:
Chapter 1: Introduction: This chapter includes the historical background of the study along with the issue specifications. Based on such issues, the research aim, objectives, and questions have been formulated.
Chapter 2: Literature Review: The chapter includes the evaluation of the secondary information by focusing on the subject matter. The literature study also contains the in-depth analysis of the capacity of the Somalia institutes, maintenance of the stability, and effects of corruptions.
Chapter 3: Research Methodology: The chapter evaluates the systematic methods for conducting the research study. The qualitative based case analysis is highlighted in this chapter.
Chapter 4: Analysis: The chapter analyses the themes extracted from the information discussed in both the literature review and research methodology part. The secondary information will be gathered to analyse the underpinned variables.
Chapter 5: Conclusion and Recommendation: The final chapter concludes with the summarization of the entire study. The concentration on the findings is associated with the justified recommendations that can add value to the research subject matter.
The identification of the fundamental issues has been specified in the context of the oil and gas exploration in Somalia. The articles based on the diversified aspects of the oil consumptions are evaluating the key matters that are exploring the subject in specified ways. In the year of 1983, James Ferrari wrote an essay on “Oil and Troubled Water”. He explained that Somalia imported the crude oil, which was refined in the outside of Mogadishu (Merrow 2012). The place was considered as the only source of the oil in Somalia. Even, it is to be noted that most of the families were depended on the natural resources. On the other hand, it was stated by other scholars that in the year of 2000, the oil and gas industry had undergone in the piracy process (Kanareykin 2015).
The study includes the exploration of the key difficulties faced by the Somalia oil and gas industry during the upstream implementation. The similar issues faced in other countries will be enlightened through the evaluation of the major aspects.
Figure 1: Conceptual Framework
(Source: Created by Author)
It is to be noted that the first oil exploration took place in the north-east of Somalia and it was wracked by the civil war for next two decades (Affi, Elmi and Mohamed 2015). As per the report derived from the Canadian firm, it was seen that only two wells were drilled in 21 years. Depending on such initiation, Puntland started the drilling process for ensuring the effective opportunities. Issa Farah, the head of Puntland Petroleum and Minerals Agency stated, “It’s a new beginning- if oil is found it will change Somalia for the better” (BBC News, 2016). However, it is to be indicated that the colonization of Somalia lasted for only five decades since the colonial powers did not pay attention to the oil explorations. A small group of British Administrator used to manage the north colony of the country, which was the major part of the potential oil fields (Anthony 2013). Some of the colonial soldiers used to support the reigns. Even, the colonial power was limited within three major cities in North. These three cities are Burco, Barbara, and Hargeisa. There are mainly two reasons for such insignificant presence of British Empire. The first reason was concentrating on dangers underpinned in the restricted British export market (Brown 2014). The other reason was the emergence of the imperial policies that were robbing the natural resources of colonized people during the British imperialism.
In the year of 1960, Somalia became the independent country. It is true that the country started enjoying the democratic environment (Bruni 2014). However, simultaneously, the country was indulged into the political corruptions. In considering the Somali society, it was seen that the political party expressed the tribal structure, which caused the emergence of the political competitions (Bruton 2014). The competition rose by depending on the suitable interests and eliminated the ideology of the right-to-left political spectrum. It is notified that in the year of 1968, almost 200 parties ran after the parliamentary elections (Cederman, Gleditsch and Buhaug 2013). Each of the parties represented the specific clans and tribes.
The effects of the dictatorship in politics increased in the post-civil war period. In the current scenario, the tribes are considered as the central form of social organisation (Morris and Fessehaie 2014). In fact, they are taken into consideration as the part of the population who deserve to get the fair deal. One of the popular Somali psychiatrists mentioned the superiority of the Somali governance by including the power of the tribes (Panagiotis and Georgia 2013) The formation of the united group in the huge country Somalia depends on the tribal structure, which is a partial system of egalitarian clients. In keeping the concentration on the previous decades, it was seen that the tribes were considered as the economically-autonomous group and the aim of such constituted group was to protect the members (Woertz 2013). The emergence of the newly independent country along with the proper urbanised environment contributed the social place to the tribes. Therefore, the tribes could facilitate their business opportunities and the political parties started representing the specific tribes (Khadiagala 2015). Even the heads of the civil service department employed the members from their personal tribes. In the year of 1991, the beginning of civil war reflected the natural form of tribal allegiance.
The tribes became more institutionalised in the parliament seats in the post-reconciliation period. As per the rule, the elders of each tribe would select the individual who will be the member of the parliament (Lanteigne 2013). When one individual was chosen by the elders of a specific tribe, the person would be provided with a set of privileges. In return, the person needs to provide the benefits to the collective tribal body. The condition created the significant issues in the upstream oil exploration (Ledesma 2013). After such situation, both the foreign company and the Somali government would consult with the tribe before dealing with any sort of oil exploration (West 2014). For example, it was seen that a local tribe in Barbara violated the decisions undertook by the Somali Government and Genel Energy, which is an oil company listed at the LSE. The tribal value was absent during the decision making process and this was the main reason for the tribal person to be angry on such situation.
During the period of 90’s, the northern region was separated from the unitarily and this was the time when other regions were adopted the federalism (Zongying et al. 2013). The single tribe has been leading and controlling each of the regions. Therefore, it can be stated that the tribal structure became the part of the spatial structure in a very significant manner. Even, each of the tribe has the authority to own a part of land, which is the base of the Somali federal states (Yin 2013). It is to be noted that the tribal lands are unofficial and eliminated from the real marking aspects. Therefore, it can be stated that the contracts that the government has been signing with the foreign oil companies do not have the verified legitimacy (Yang et al. 2014). The reason behind such illegitimacy is the positions of the federal states, which is determining the fair dealings with the tribal lands. The Somalia Government has the limited power, which has made the reason more complicated (Windsor 2013). Moreover, the constitution even remained silent when the revenue collected from the natural resources was owned by the government.
The collision of the dictatorship of Siad Barre regime was the source of Federalism in Somalia. The emergence of Federalism has been much argumentative in the history of Somalia oil and gas industries. Wilson (2016) implied that Somalia became the place of international disaster due to political and religious conflicts, civil war, and insurgencies. Moreover, the place was alleged as the land of piracy and the heaven of terrorism. Hence, during the Federalism, the state-building project was significantly hampered. On the other hand, Ross (2012) stated that the political war amongst the member of international community became much hazardous for Somalia. Due to such traumatized situation in Somalia, the competition over the natural resources was nullified (Brown 2014). In fact, it was observed that the federalism system in Somalia was unauthentic and invalid (Somalilandpress.com 2015). Anthony (2013) stated that the inconsistencies in the Transitional Federal Government were much foreseen and the power sharing of the President, Prime Minister, and Speaker was the major reason behind such inconsistencies. The emergence of such hazardous situations left Somalia into a dilemma of accepting either federalism system or unitary system.
The proverb “Black gold is a resource curse” has become true to the many African citizens in this current situation (Vasquez 2013). The outbreak activities in the Somali oil and gas industry caused many of the countries take the interests on the country. During the period of 1980, a huge number of companies got the licence preferences in Somalia. However, the main concern of these companies is security while dealing with the Somali oil and gas industry (Urciuoli et al. 2014). A larger part of the Middle East was discovered with oil coincidently. Even, the growth of the oil was associated with the oil production, which formulates the severe form of issues. The results derived from the empirical evidences of different countries proved correct in terms of determining the issues with the natural resources (Taylor, Bogdan and DeVault 2015). It is to be noted the oil and mineral is interrelated with the economic dependence by determining the slow economic growth. This slow growth in the economy featured the great potential for conflicts and corruptions (Su, Wei and Tao 2016). In fact, the process is even controlling the structural attributes of the country more specifically.
Nevertheless, the in-depth analysis of the institutional literature study is highlighting that the association of the natural resources and resource curse do not serve as the driving force for inefficient outcomes (Stevens, Lahn, and Kooroshy 2015). It is to be noted that the natural resources have played the most significant role in considering the resource development in rich states. However, the presence of the weak institutionalised environment determines the existence of the resource curse, which increased the conflicts in developing states (Sovacool 2016). It is notified that Nigeria has the biggest economy and the most resource rich state in Africa. Therefore, it has been seen that Nigeria had to suffer from Resource Curse and weak institutionalism (Smith 2015). The existence of such issues led the state towards corruptions more significantly.
It was mentioned previously that during the period of 1980, many of the licenses were provided to the number of companies (Ross 2012). Most of these companies were American. However, it is to be specified that these companies were more concerned about the security assurance while dealing with the Somali oil and gas industry (Pollet, Staffell and Adamson, 2016). Apart from the security assurance, the companies even found out several concerns with the analysis of the cost-benefits. In the year of 1990, Conoco decided to close the Somalia offices and stopped investing $800 million in a country, which is on the brink of war (Pishdad, Haider and Koronios 2012). Therefore, the country remained in fear of natural resource dealings with the other countries.
In keeping concentration on the extraction of the natural resource, it is to be indicated that the initial investment did not come from the colonial power (Palmer 2014). Hence, the barriers in the oil market entry have been much specified and well documented. This aspect is considered as the biggest cause for the falling of Global South camps. The countries under the colonial masters and countries of American oil firms fell into the divisions of these camps (Omeje 2016). The oil contract signed between the American companies and Abu Dhabi government was rumoured to be provided 20% less profits (Olawuyi 2015). This is the main reason of high rate of the initial investments. In keeping concentration on the recent dealings between Soma oil and Soma government, it has been seen that almost 90% profits to Soma oil whereas 10% profits were provided to Somalia government (Obi 2014).
It is to be noted that the global oil industry has been going through the huge commotion in current years. The Organisation of the Petroleum Exporting Countries or OPEC faced the difficulties in holding the same position that used to be in the previous time (Nickels 2015). The reason behind such difficulties is the decreasing rate of the petrol prices and the flourishing nature of the US shale and tight oil industry. The act of corruption in Somalia created the challengeable effects on economic structure. The British Oil exploration firm even alleged Somalia due to the corrupt payments to the officials of Governments. In the year of 2013, Somalia Oil and Gas signed an agreement with the British start-up for exploring hydrocarbons. During such agreements, Somalia was accused of making corrupt payments to the government officials to return rights and exploring the offshore for hydrocarbons. The allegations against Somalia created the negative impact on the economic structure and due to such consequences, the oil and gas industry faced the significant downfall in the market. In fact, it was evident that Somalia was not a member of regional blocs of economic section and was sharing the formal dealings with other nations (Irinnews.org 2014). In most of the cases, the regional partners imposed the strict regulations on Somalia due to security fears. The application of such strict regulations even was considered as the major obstacles for the economic growth in Somalia oil and gas industry.
Some of the technological obstacles were found in entering to the energy market of Somalia. However, the barriers implicate the different aspects in a specific manner (Nazari, Herremans and Warsame 2015). The efficient investment in the economic fields required the support of the technological amenities for reducing the product differentiation and costs. It is to be noted that once the investments are being associated with the research and development procedure, the efficient outcomes signify the enhancements of the profits (Morrison 2014). For example, in the year of 2010, Exxon brought a new technology in the market, which was much helpful in increasing the capacity of the production and reducing the costs (Mohamoud 2015). However, the identification of the problems due to technical barriers is thus capturing a significant place. The efficient technology is thus very much helpful in maximizing the productivity by reducing costs (Menkhaus 2013). This is even much significant in maintaining the profitability assurance for the oil and gas industry.
With the help of the sufficient technological adaptation, the Somalia oil and gas industries have been trying to increase the port security. Since, the impact of the piracy on ports was quite significant; the instable areas therefore seek for the security concerns. Some of the ports are protected from the outsider pirates. The outside countries even tried to explore the hydrocarbon in Somalia. The use of the latest technicalities for exploring such oil and gas has created the significant impact on the economy. The production needed the featured technologies, which could fill up more than five million barrel in a day. However, the lack of sufficient knowledge affected the growth in the economic structure. The skilful attributes were needed to be taken into account. However, the corrupt technologies in oil and gas industry of Somalia were also quite insignificant for the country’s oil exploration purposes (Nazari, Herremans and Warsame 2015). The small firms in Somalia are still trying to find the better technological equipment for exploring the oil and gas in the offshore places.
The chapter is associated with the secondary information gathered in terms of defining the recognised issues in the oil and gas industry in Somalia. The study has focused n the different barriers and several process that affected the natural resource management. The social and federal environment signified the issues with the social corruption, which affected profitable areas of the oil and gas industry. The gathered data from the secondary sources would be associated in the data analysis part, which will help the researcher to present the appropriate recommendation for overcoming such issues. The country has become under the term ‘resource curse’ due to the insignificant association of the resource dealings. The power of the tribes has been explained by providing the in-depth analysis. Issues with the stability and technological amendments would be taken into considerations for the emerging issues in the oil and gas industry of Somalia. Based on such information, the researcher would be able to gather the empirical data for theme analysis.
The research methodology is subjected to conduct the research process in a systematic and structured way (Creswell 2013). The research is based on the key challenges faced by the Somalia Oil and Gas industry during the investment to the upstream sector. The major objective of the study is to understand the basic and recognisable problems, which have been affecting the oil and gas upstream in Africa. Moreover, the study highlights the impact of the different challenges that can lead towards successful evaluation. The achievement of such objectives will be associated with the qualitative approaches that have been adopted in this study. The use of the appropriate research design, structure, strategy and methodology would be initiated to describe the context based information. Two of the major techniques have been amalgamated by evaluating the necessary research strategy. The systematic application of the research design, data collection, and the process of data analysis will be discussed in this chapter.
The entire research study is based on the sequential conduction process and is needed to be considered several stages that formulate the proper methodology (Mackey and Gass 2015). In keeping concentration on such requirements, Saunders, Lewis and Thornhill (2009) developed a sequential model for describing the diversified stages in the research methodology. The first stage describes the research philosophy, which usually requires the definition. The philosophy is considered as the starting point for undertaking the next step, which is research approach. The third step is to identify the proper research strategy that is needed to be adopted for the research purposes. The fifth stage determines the proper time scheduling and the final step reveals the data collection procedure. The significance of the research onion is to create the sequential stages by the application of the diversified methods and structure the methodology for the research purposes.
Figure 3.1: Research Onion
(Source: )
The research design signifies the relevant process that can add value to the discussions based on the subject matter (Davis, Golicic and Boerstler 2011). It is to be noted that the qualitative research evaluates the argumentative discussion regarding the process of analysing the subject matter in a significant way (Campbell and Stanley 2015). Therefore, this particular research method has been adopted in this study to understand the situation in Somalia. In fact, the study is associated with the secondary information depending on the identified variables of the research study. Based on the subject matter, the researcher needs to keep the focus on the relevant research design that can be effective for the study completion. The recognised variables for this study are institutionalism, security, and resource curse. Based on these variables, the subject matter will be analysed.
The definition of qualitative research is explained in numerous ways. Bryman and Bell (2015) explained the qualitative research determines the preference of words, rather than depending on the quantification of the numerical data analysis. The qualitative research method is even signifying the other features as well. The study highlights the interpretation of the inductive approach that defines the significance of the epistemology position of the subject by reviewing through the incidents in social world (Csikszentmihalyi and Larson 2014). The study is even highlighting the ontological position that has been associated with the social interaction.
In defining the results, the qualitative research is focusing on the word preferences by initiating the in-depth observation (Crouch and Pearce 2012). The researcher has to take the responsibility to conduct the entire research study in a systematic manner. On the other hand, the researcher has undertaken the case study approach as the research strategy. The applied methodology is contributing the enhancement of the knowledge regarding the subject matter. The method is quite justified since it establishes the holistic approaches based on the literature review study.
The collected data is needed to be analysed with the proper implementation of the relevant methodology. The data collection types can be different for the diversified aspects. The data collection method can be ranged in various forms, for instance, open-ended questionnaires, literature, report, and case study analysis (Bryman and Bell 2015). The collected data for this study will be utilised for formulating the themes underpinned the literature study. The secondary data collection process will be presenting the key challenges more specifically.
The researcher will be using several relevant sources of information in order to analyse the collected data. The background knowledge of Somali state would be initiated from a source named “Somalia: nation in search of a state”, which is written by Laitin and Samatar. Sach and Warners have presented the idea of resource curse through the evaluation of the literature named “The Curse of Natural Resources”. On the other hand, the researcher will also use several on-line journals, reports, and articles from the different sources. In analysing the case study material, it is important to gather the information from the relevant sources. The method is somewhat realistic and related to the real life events. The case study analysis requires the evidenced based information to prove the validations and it needs to be contextualised (Hesse-Biber 2012). The phenomena need to be more clarified and structured in a systematic manner.
The case study based on the scenario of Somalia is reflecting both the primary and the secondary research questions along with the presence of three different variables. These three variables are corruption, stability, and institutionalisation. Since, there is the lack of reliable and authentic statistic in the country, the discourse analysis of the study is depending on the theme extraction process. The application of such methodology is determining the concentration based on the corruptions, stability, and institutional capacity. The study is associated with the CIDCM’s peach and conflict instability ledger that is extracting the statistical relationship between the factors (Anthony 2013). These featured factors are institutional consistency, current instability, infant mortally rates, economic openness, and militarization. The description of the factors is provided below:
|
Factors |
Domain |
Description |
|
Institutional Consistency |
Political |
This particular factor is defining the extent, which signifies the maintenance of the consistency in democratic or autocratic institutes. It is to be noted that the institutes, which are associated with both the democratic and autocratic features are the examples of instability institutions (Balikuddembe and Ardalan 2014). |
|
Current instability |
Political |
The current instability refers to the coded version of the country by Political Instability Task Force (PIFT). The country has experienced the event in the end of 2009. |
|
Infant mortally rates |
Social and Economic |
This factor is mainly indicating the proxy rates that have been facilitating the economic development process of a country (Anthony 2013). The advanced level is adding value to the social welfare policy and the building the capacity to provide the effective services to the population. This particular indicator is signifying both the social and economic domain of the country more specifically. Moreover, the linking between future instability and infant mortality rates will be reported by PITF. |
|
Economic openness |
Economic |
The economic openness is describing the extent, which is representing the collaboration between the integrated global economy and the economic structure of a country. It is noted that the countries combined with the global market usually face the lower instability (Nazari, Herremans and Warsame 2015). |
|
Militarization |
Security |
The militarization is subjected to the security aspects. It is to be notified that the countries that have maximum opportunities of armed conflicts are associated with the greatest instability (Ahali and Ackah 2015). The societies with accessible capital and infrastructures of armed conflicts are seen to be much associated with the civil issues. It has been seen that the one portion of the country is extended by the training and skills of the militaries along with the other weapon stocks. The availability of these resources has enhanced the scope of extreme instability and provides the opportunity of mobilizing (Bridge and Le Billon 2013). |
(Source: Anthony 2013, p.135)
The research study includes some of the recognizable limitations, which may affect the entire process. The most prominent limitation is the proper source of validating the data collected for the research study. Even the researcher faced the difficulties in accessing the updated data similar to the subject matter. It is important to use the updated information, which is helpful for understanding the current scenario. However, the most significant limitation in this study is the time limitation. The researcher would have provided the extensive research related to the subject matter. However, due to the time bound, the research became somewhat limited and lack of more information. The recognizable limitations are quite challenging for the entire research process.
The social research is often including the biasness, which affects the research outcomes. In shedding light on such issues, the researcher needs to find out the proper way of eliminating such hindrances. The validation of the data sources is thus considered as the most necessary aspect (Csikszentmihalyi and Larson 2014). The amalgamation of reputed and various sources would be effective enough in completing the discourse analysis. The evaluation of the five step process can ensure the validated and reliable data for this research. The close concentration on the categorized information, interpreted and identified patterns, and the structured presentations are needed to be gathered together for ensuring the authentication of the information. The updated and authenticated information can even explain the exact subject matter more specifically.
During the conduction of the research study, the researcher needs to focus on several ethical considerations. Firstly, the researcher needs to use the updated journals and other sources, which will be incorporated in the research study. Since, the scenario has been changing each day; the updated journals can be more effective to be used for completing the research study. The conduction of the research needs the validation of the data. Therefore, the researcher needs to take the authority for searching the appropriate books, journals, and websites for generating relevant data for this research study. Another most important ethical consideration signifies the disclosure of the information. The researcher is not supposed to disclose any information source to other researchers. In fact, the researcher cannot even use this specific data for the next research. This particular information will be used once in this particular study. The researcher cannot provide the same information for other similar research conduction process. The concentration on such ethical norms is necessary for fulfilling the objectives of the research study.
hile conducting the research study, the researcher had to face several accessibility issues related to the applied process. The lack of enough information based on the Somalia oil and gas industry is one of the most significant issues. Moreover, the researcher could not get access to the exact subject matter and worked with quite closer view of the related subject matter. In many of the cases, the researcher lacked the confidence for fulfilling the tasks. However, by overcoming each of the obstacles, the researcher could be able to gain much strength for completing the study.
This particular chapter of the study evaluates the application of the relevant methodologies for conducting the research in a systematic way. The use of the significant approaches, strategy, and designs is described in this chapter. Based on the variables, the study indicates the relevant techniques that can fulfil the requirements of the study. The amalgamation of the aspects would be analysed through the application of the proper methodological strategy. The recognition of the proper analytical tools by collecting the relevant data on the subject matter is necessary for completing the study. Therefore, it can be interpreted that the completion of this research study requires the association of the proper research methodology, which can add value to the research subject. Depending on such applied methodology, the further analysis of the information will be determined.
This section of the study is presenting the discussion regarding the theme analysis based on the subject matter. The study is based on the emerging issues faced by the Somalia oil and gas industry. The effectiveness of the oil exploration has also been discussed in this study. The collection of the secondary data in the literature review part has been taken into consideration in this study. Depending on such secondary data, this particular chapter will be including the theme analysis of the research variables. The analysis of the further study has been presented further.
As The discussion regarding the political environment in Somalia, there is assimilation of Soma oil and gas exploration and quasi state has been foreseen (McDonald 2013). During the year of 1991, the insignificant political arrangements, the products received from the oil and gas industry were collapsed. In the year of 1991, a new country named ‘Somaliland’ was established by the Northern region. Simultaneously, the Unilateral Secession was also declared (Maystadt and Ecker 2014). The establishment of the new country was dependent on the emerged borders of British Somaliland Protectorate. After achieving the De Facto independence, the country Somaliland reflected the commendable stability (Marriott and Minio-Paluello 2014). The country avoided the civil war that caused severe consumptions of the Southern Region of Somalia and held the democratic elections (Devine and Severova 2015). The Barre government provided the concessions to the oil majors, which are mostly based on the Somaliland of recent times (Mackey and Gass 2015). It is to be noted that the geologists and the petroleum experts pointed out that the Somaliland has the largest concentration of oil hydrocarbon (Nazari, Herremans and Warsame 2015). It is notified that the due to the effective oil and gas exploration, the East Africa gained the interests of energy development in traditional market of Somalia (Limo and Muna 2015). However, the emergence of civil war wracked the secessionist movement. The emerged challenges in the social and political scenario were considered as the obstacles for the energy exploration of the country. It has also been seen that the Somali government allowed many of the prospective oil firms to get the license for establishing their business (Ledesma 2013). The multi-billion company Genel Enegy signed the largest contract with Somaliland government and Tony Hayward, the BP CEO of the company (Le Billon 2013), led the event. Even, in the year of 2011, the company Genel Energy signed two other agreements worth the estimation of billion dollars.
As a Federal state of Somalia, Puntland started to sign the agreement and dispersed oil and gas contracts to foreign firms. In the year of 2005, the first contract signed by Puntland was with Australian company Range Resource (Lameck Kibikyo and Omar 2012). In the year of 2007, Puntland signed the Production Sharing Agreement with the same company along with the partner company named Canmex Minerals, which is the subsidiary of Canmex Holdings. It is to be indicated that Puntalnd came into existence by signing an agreement amongst the tribes in the region (Kessides 2014). However, the state has been much dedicated to a united nation, rather than being called as a Federal State in Somalia (Devine and Severova 2015). The diversified decision making process sometimes proved crucial in understanding institutional background regarding the oil and gas exploration in Puntland (Intawong and Berryman 2015). It is to be noted that in the year of 2012, both Range Resource and Africa Oil started the drilling procedure in Shabeel-1 well after signing one of the significant exploration programs with the authority of Puntland (Hills 2014).
It is important to note the association of Puntland, Somaliland, and other foreign oil and gas company is concentrating on the deliberate sidestep regulations of Federal Government (Maystadt and Ecker 2014). In the year of 2013, Somalia was internationally recognised under the Federal government for extending the diplomatic administration of Hassan Sheikh (Hills 2014). The result of such events is highlighting the oil and gas exploration of Somalia government in the basis of legal and institutional terms (Devine and Severova 2015).. Based on the independent Northern Regions, Mogadishu based Federal Government continued with the hand out licences in blocs (Hesse 2013). The report extracted from United Nations, the criticism in practices has been foreseen. It was stated that some of the agreements could create the conflicts and are literally premature (Nazari, Herremans and Warsame 2015). More specifically, it can be inferred that the reason of the conflict is the lack of consultation with regional authorities, which can be affected more significantly.
The emerging conflicts were the reason of collapsed central government in Somalia. In fact, it had even created the significant challenges in ambiguous national resources laws. In the year of 1988, the previous Transitional Federal Government passed a law named The Somali Petroleum law, which was quite effective and it permitted the regional authorities to consider the liberal interpretations (Hawken, Lovins and Lovins 2013). It is important to know that any agreement related to the oil and gas exploration should be under concerns of both Federal and Regional Government. Due to such concerns, many of the institutional hosts and legal questions arose (Devine and Severova 2015).. In fact, the concerns are especially for Somaliland, which has no linking with the central government in spite of being a state (Hassan 2013). On the contrary, it has been seen that Puntland got the facility of establishing the cordial relations. It is to be indicated that this particular law was passed by keeping concentration on both Unionist Federal states and Puntland (Hammond 2013).Nevertheless, the considerations in law are not separating the barriers established between regional governments and central governments. It is to be noted that the Somalia oil and gas industry has been facing the legal interpretations like “regionalism” and “federalism” along with the constitutional rights of the states (Hamlin 2014). The President Abdullah Yusuf Ahmed granted the negotiation process with the regional state for sharing the oil agreements. However, the issue cropped up again during the Sheikh Ahmed’s legislation enactment process, which was based on the “null and void” contracts made between the regional administrators and oil firms (Habiyaremye and Oguzlu 2014). The fundamental challenges emerged due to such disagreement of the policies by two administrations. The challenges became more prominent due to the inadequate legal structure of Somalia.
It is to be noted that some of the concerns are yet to be discussed before analysing the literature of Resource Curse and poor institutionalisation. The emergence of some of the pressing issues is also present in such cases (Gure, Yusuf and Foster 2015). One of the most significant issues is the poverty aspect of Somalia. It is evident that Somalia happens to be a very poor state in Africa and it was under the extreme level of the civil war (Maystadt and Ecker 2014). Hence, the state could not manage the requirements of the infrastructural activities in the oil and gas upstream level (Grunewald 2012). The logistical operation of the oil and gas upstream activities includes the maintenance of the adequate roads, port facilities, accessible deep water, and presence of the shipping corridor (Devine and Severova 2015).. Hence, the identified challenges are affecting these segments during the implementation of the agreement related to the oil and gas exploration in Somalia (Garcia 2014). More specifically, the North Eastern Region and Somalia suffered from the extreme rate of piracy dealings and due to such issue, the shipping companies started avoiding the Somali waters (Nazari, Herremans and Warsame 2015). Until the time Somalia is not paying the attention in rectifying the infrastructural challenges, the development of oil and gas upstream level would not be possible my any means of way (Elo et al. 2014). Therefore, the maintenance of such infrastructural challenges is necessary for preventing the obstacles in oil and gas sector of Somalia. As per the objective of the research process , there is a significant influence of the federal state on Somalia oil exploration . The federal state has assisted Somalia in the exploration of oil and gas resources to other countries. It has emerged as the guiding authority in the country to administer the oil and gas production in the country. The federal state provides the logistics as well as the operational business requirements to assist Somalia in building a profitable business model.
The issues with the institutionalisation in Somalia are associated with many of the argumentative segments (Devine and Severova 2015).. The collaboration between the regional government and the central government has affected the ownership aspects over the existence of the natural resources. The identified weak institutions of Somalia were much influenced by the civil domestic conflicts for two decades (Devine and Severova 2015). The emergence of such civil conflicts affected the economic development as well. The conflicts were quite natural due to the higher value of natural resources, which create the significant impact on the labour and capital investment (Maystadt and Ecker 2014). Many of the researchers found the numerous issues while conducting the research study based on the institutionalisation of Somalia (Cust and Harding 2014). It is notified that the dependency of the state on oil and gas is somewhat interrelated to the functionalised war presented in the state (Nazari, Herremans and Warsame 2015). The oil-rich countries like Congo and Angola also faced such conflicts due to the resource curse (Cust and Harding 2014). The issues with the institution process and the resource curse are the main reasons for the emergence of the conflicts in the countries, which are associated with the rich natural resources.
In keeping the concentration on the legislative oil laws in Somalia, the collaboration between the regional government and the central government has been found more specifically (Devine and Severova 2015).. As per the economists’ suggestions, the weakness of the institutions can enhance the lavishness during the development of the economy through the oil and gas exploration (Clayton 2015). It is evident that Somalia has the lack of institutionalisation aspects as well as lack of accountability within the government. Somalia Eritrea Monitoring Group or SEMG is a panel of investigators who are associated with the monitoring process of compliance management Chattopadhyay, Martin and Stearn 2015). This particular panel accused the Mogadishu based government in a series of contracts. The contracts highlighted the issues with the transparent accountability maintenance (Nazari, Herremans and Warsame 2015). As per the report presented in 2013, the perception of SEMG highlighted that the oil and gas deals intensified the ownership disputes and transparent development of the oil and gas sectors in Somalia (Maystadt and Ecker 2014).
During the time of September in the year of 2013, a landmark summit took place between EU and Somalia. The deal was signed for strengthening the long-term partnership between EU and Somalia (Chasek, Downie and Brown 2013). After the civil wars for decades, Somalia started to emerge from the crisis. Eventually, the state started to face several potential challenges in security, political, and developmental areas for reaching to the pre-determined goals (Maystadt and Ecker 2014). The conference held in Brussels in September 2013 endorsed the efforts of Somalia for re-building and stabilising the peaceful nature across the country (Bruni 2014). The conference reconstructed the structure of Somalia by implementing the promoting tools for inclusive politics and security rules and regulations. Moreover, the supports from such regulations are determining the socio-economic development of the country till the year of 2016 (Anthony 2013). The efforts of the combined forces enhanced the opportunities to build the international relationships.
It is to be noted that EU has always been supportive enough in building up the peaceful environment in Somalia. EU even encourages the development of the democracy, Somali-owned governance, and reconciliation process (Affi, Elmi and Mohamed 2015). The supports of EU are thus being much beneficial for the establishment of the sustainable and profitable economic growth that can improve the living standards of the vulnerable groups (Nazari, Herremans and Warsame 2015). The association of EU and Somalia government includes several developmental segments like political engagement, operational values, and cooperative measurement (Devine and Severova 2015). It is to be indicated that the allocation of €286 million by the European Development Fund was simply concentrated on food security, building of state and peace, and resilience and education (Nazari, Herremans and Warsame 2015). Since, Somalia has been facing the severe issues with the security aspects; the implementation of such supportive actions would be beneficial for the state.
According to the research objective of the firm , lack of inherent strength has affected the upstream natural gas and oil resources in the country .This refers to weak governance and the adverse influence of domestic violence and conflict in Somalia. The weak coordination between the regional and the central government in the country has lead to the ineffectiveness of the institutions in the country.
Oil wealth is considered as the potential and significant aspects of developing the economic structure of a country (Maystadt and Ecker 2014). However, in spite of being so much significant, oil wealth is not the recognised and structured solution for underdevelopment and conflicting scenarios. Countries like Botswana, Chile, and Indonesia derived beneficial profits from the natural resources. In fact, the oil experiences in Nigeria and Turkemenistan have also been considered as the significant events that determined the economical development of the country (Cust and Harding 2014). Even though US registered almost $800 billion revenues in Nigerian natural resources, the average per capita income of the country is only $1 per day. In analysing the hypothesis of the resource curse, it is to be mentioned that both the resource-poor economy and resource-rich economy countries have been facing the recurring experiences while ensuring the economic development (Devine and Severova 2015). It s cleared that the economy of Somalia is mainly driven by the agriculture, money transfers, telecommunications, livestock production, and forestry management activities (Nazari, Herremans and Warsame 2015). In fact, some of the fraudulent acts along with the piracy crimes are also considered as the source of generating money in Somalia. The State is even developing the economic structure by evaluating such activities on regular basis. Devine and Severova (2015) pointed out that forestry, livestock, and fisheries are the main contributors of developing the GDP rate of Somalia economy. It is to be indicated that being the backbone of the Somalia economy, the agricultural activities have been contributing almost 60% of the GDP by employing almost 65% workforce.
It is already mentioned previously that the natural resources of many of the developing countries can be considered as the lucrative cash cow in terms of generating the revenues. In keeping focus on another dimension of ‘curse’ are emerging the potential conflicts in the society. In fact, the larger scale of generating revenues can create the greater competitions between the rival factions. Even in case of Somalia, the state has the history of rudimentary oil exploration (Nazari, Herremans and Warsame 2015). The factors have become much prominent, as the activities of oil exploration did not reach to the expected level of oil resource existence. The reason behind such failure is the ineffective political environment. The political background of Somalia is effective increasing the potentiality of conflicts. In fact, due to such reason, the international donors stated the caution to the oil companies, which have made the agreements with the regional oil companies of Somalia (Balikuddembe and Ardalan 2014). In the year of 2014, the company Genel suddenly departed from Somalia by receiving enormous pressure from international community. Even the central government of the state asked the company to cease the involvement in the oil sectors and present the report to the government directly. The central government took such steps in spite of the presence of engagement policies on the oil and gas sectors (Cust and Harding 2014). The event caused the slow moves of the oil exploration in Somalia in spite of having the potential resource strengths. Therefore, it has been seen that the resource curse thus created the recognisable violations between these sectors.
In shedding light on the theory based on Resource Curse, it has been seen that most of the potential phenomenon is the source of political influences. The inefficient government affect the outcomes of the resource management activities in the developing countries. On the contrary, some of the people argued that the effective and strengthened governmental policies are sometimes helpful for avoiding the worst excess of “Resource Curse”. The general form of ‘resource curse’ has been considered as the emerging problem for Somalia. The appearance of industrialisation in different states is the major reason behind the destruction of the natural resources. Since, the country becomes much fond of quick wealth; the corruptive activities increases much prominently (Hesse 2013). On the other aspect, it has been seen that the preventing the development of diversified economic infrastructure is also one of the significant reasons of misusing the natural resources in Somalia.
The emergence of the resource curse is signifying the presence of the sever forms of corruptions amongst the governmental aspects in the emerging countries. The influence of such acts of generating the revenues has diminished the both governmental accountability and oversight and has led towards adopting the activities related to the corruptions (Balikuddembe and Ardalan 2014). The Central Bank of Nigerian Government revealed that most of the revenues generated from the Nigerian oil resources have been lost due to the emergence of governmental corruptions. The rent seeking behaviour of the state institutions has been considering as the driving force for the corruptions. Cust and Harding (2014) argued that the dependency on the natural resources is the main measurement tool for the corruptions. Most of the acts of government signify the rent seeking behaviour, which is causing the long term loss in the economic growth.
The emergence of the potential corruption in Somalia is affecting few of the areas associated with the development of the economic values. It is to be noted that the corruptions affects the security sector of the state and country, which is associated with both the immigration services and security forces. Due to lack of resources, the public officials are not paid with their expected fairs (Bridge and Le Billon 2013). This significant problem leads them towards bribery and extortion. Usually, these security forces sell their equipment and arms for managing the salary. In keeping the concentration on the international observers, it has been seen that most of the corruptive acts usually take place in Mogadishu port and in the international airport (Balikuddembe and Ardalan 2014). The absence of transparency during the revenue collection at the international airport emerged as some of illegal cases and smuggling acts. However, even though there are the changes in the administrations, still the airports remained the major source of corrupt revenue.
The economy of Somalia is mainly based on the livestock, telecommunications, and informal sectors. As per the research report derived from the monitoring agency in the year of 2013, it has been seen that the fall of Barre’s regime was somewhat responsible for fuelling corruptions. It is noted that the enterprise do not pay the regular taxes as per the legal rules However, the senior FG officials are getting the fees and they are thus supporting the foreign business dealings. The act is helpful in satisfying the government and extracting the approval as per the benefits (Balikuddembe and Ardalan 2014). In focusing on the corruption rate in the oil and gas sector, in spite of having the lack of concrete oil drilling, there are some of the significant cases based on the corruptions. In the year of 2015, it was found that Soma oil and gas has been engaging with the corruption practices by the influence of several British oil and Gas industries. Nevertheless, it can be stated that the resource boom is somewhat affecting the economic development more significantly.
Since, the Somalia oil and gas industry lacks the process of concrete oil drilling; the state includes many of the significant cases of corruptions. Many of the oil and gas dealings turned out to be associated with the corruption cases. An analysis of the news report indicates that Lord Michael Howard stopped the payment of more than a half billion dollars to the officials of government. He did not pay the amount for protecting the oil exploration deal, which was signed in the year of 2013 (Bridge and Le Billon 2013). The Serious Fraud Office (SFO) in Britain claimed for the investigations regarding such following allegations based on the corruptive acts (Cust and Harding 2014). The United Nations Monitoring group participated in this investigation process. As per the perspectives of the investigators, it was seen that almost $690 000 payments made were fully suspicious (News24 2015). The allegation confirmed that since June 2014, almost $580 000 amount was invested into “capacity building programme”, which is suspected as the corrupt payments to the officials of Soma Government (Balikuddembe and Ardalan 2014). The indication of the corrupt acts is thus concerning negative effects on the oil and gas industry in Somalia.
The authorities of Somaliland were accused during the time of entering into an oil sharing contract with an oil company of Norway named DNO. The company DNO was offered a disputed region, which is bloc based in the Sool region. This disputed region is based in the midst of Puntland and Somaliland (Savitzky and Urry 2015). The business offerings emerged the war against the Soma oil and Gas Company in the year of 2007. Even on that particular year, the rebel movement was based in “khatumo state’, which rejected the presence of DNO. However, emergence of such corrupt situations is affecting the oil and gas dealings in Somalia. As per the objective of the research study, Somalia has been suffering due to rising corruption levels .Corruption has been a pertinent adverse influence on the workings of different government and private institutions in the country. This has been an important reason that has been affecting the commercial viability of Somalia oil and gas upstream resources.
The continuation of the oil and gas exploration process, the in-depth analysis signifies the effects of the ‘Dutch Disease’. The implication of “Dutch Disease” is related to the review and discovery of the natural resources, especially oil. The ‘Dutch Disease’ is mainly describing the negative impacts on the economic structure of the natural resources, which are effective enough in increasing the inflows in the foreign countries. The emergence of the currency inflows is leading towards the currency appreciation, which is helping the export oriented sectors of other countries. The process is even quite helpful in making the products or sectors less price competitive in the export market. However, the model of Dutch Disease explains the existence of the large natural resource sectors, which are affecting the employment distributions throughout the economy (Savitzky and Urry 2015). The significant deposits of the natural resources enhance the demands for the non-tradable goods and decrease the labour allocations along with the capital investments to the manufacturing sectors. The tradable sectors are being much focused on the natural resources if these are available easily. Even, both the capital and the labour would be employed in depending on the availability of the natural resources that can enhance the economic structure. It is true that agriculture, money transfers, telecommunication, livestock productions, and forestry department usually drive the economy of Somalia. In fact, some of the corruptive activities and piracy works are also undertaken for generating money (Windsor 2013). However, the livestock fisheries, and forestry department are the major economic contributor for Somalia. On the other hand, the natural resources available in Somalia are quite attractive for the international community. Due to such requirements, most of the natural resources are being misused more significantly.
The application of the Dutch Disease signifies the observation in the Somalia Oil and Gas industry as well. The emerging scenario in the upstream level of the Somalia oil and gas industry is specifying the negligible attitudes (Bridge and Le Billon 2013). On the contrary, it has been seen that the economy of Somalia is mainly based on both the agricultural and live stock business. The state exports crops like bananas in the region of Southern Fertile, which is located near the Jubba River. Even, the close concentration on the Dutch Disease phenomenon, it can be stated that the increased focus on the oil and gas upstream level determines the establishment of the greater number of jobs. Therefore, if Somalia is keeping the concentration on the single determination, it would increase the unbalanced nature of the economy, which leads to the inequality and youth unemployment. The emergence of such scenario can lead towards the future conflicts. Even though the existence of the Dutch Disease is not empirically evidenced, there are the controversies regarding such aspects remained much in concern.
If the upstream level of the oil and gas exploration is termed as feasible, the security approaches in the country is also needed to be tangible accordingly. The enhancement of the security is helpful enough in enabling the oil and gas explorations and drilling activities in the regions. In the year of 2012, the issue with the stabilisation has become much prominent, as the state has achieved a few semblances by adopting new government and constitutions. Since the year of 2007, the international community and African Union Troops have been aiding Somalia. As per the objective of the research process, there are certain issues, which contribute to the financial and social instability in Somalia. The economic condition of the country and the dearth of skilled labour force are the primary reasons, which has been hampering the growth of the country. To analyze the negative influence on the upstream sector in Somalia, factors like lack in natural resources and the volatile market conditions shall be considered.
The incident even led towards devastated scenario including assassinations, bombings, and other violent activities. Due to such scenario, the instability became much prominent in the southern region of Somalia.
The location of the Central Government is in Mogadishu, which is considered as the weakness. Since the year of 2012, the oil and gas exploration activities undertaken in such places have been looking forward to achieve the stability by fighting with the insurgency (Bridge and Le Billon 2013). The emergence of such insurgency is predicting that the southern region of Somalia would require more years for achieving the stability and ensuring the implementation of the oil and gas exploration activities. In the year of 2015, the UN Security council considered the security situation of Somalia as volatile and unstable (Savitzky and Urry 2015). The improvement in the African mission is thus mostly required for determining the achievement of the stabilised condition in Mogadishu. However, it can be stated that the oil and gas exploration in the upstream level within Somalia is temporarily untenable until the concerns are based on the security situations. It is noted that the natural resources of Somalia has been attracting the international community for years and these countries have attempted to continue the oil exploitation process illegally (Balikuddembe and Ardalan 2014). The emerging corruptions and instability in the political conditions have made the country surrounded with the negative atmosphere.
The in-depth analysis of the issues regarding the different segments is signifying the issues with the upstream level activities faced by the Somalia oil and gas industry. The concentration on the political scenario, it can be stated that the negative impacts of the political instability is affecting the economic growth derived from the natural resource drilling process. The emergence of the civil war has been one of the most significant issues faced during the oil and gas exploration. The lack of proper institutionalisation is also affecting the oil and gas exploration process in a very significant manner. In spite of having the effective ways of the natural resources, the insignificant dealings are establishing the devastated scenario. Due to such scenario, Somalia is considered as the place of “resource curse”. The corrupt activities have become much prominent and have spread all over the country. The impact of the negative scenario and the instability are the main reasons for the issues emerged during the oil exploration in Somalia. Depending on such findings and the results, the further chapter will be incorporating the relevant recommendation to improve the activities within Somalia.
The chapter is associated with the findings that have been discussed in the previous chapter. The research study is associated with the issues that have been faced by the Somalia oil and gas company for investing in the upstream sector. The extracted information from the secondary sources is highlighting the key issues underpinned the subject matter. The effects of institutions have been creating the significant impact on the upstream level. Moreover, the recognition of the resource curse is also signifying the consequences faced by the Somalia oil and gas industry during the investment on upstream level. Based on such information, the suitable recommendation would be provided in this chapter. The scope for the future researches will also be discussed in this chapter.
After conducting and gathering the results from the entire study, the researcher has investigated the different arguments regarding oil and gas upstream system activities within the national boundaries of Somalia. It is quite a well-known fact that Somalia is undoubtedly a country that is less developed in terms of economy. This particular country faces several institutional, administrative, and legal hindrances that thwarted the process of upstream oil and gas exploration in the country.
The entire study of the research if summarized derives a result that highlights that the main or the prime challenges or issues that are faced during upstream oil and gas exploration in Somalia are highlighted as follows:
The chequered political history that is linked with the legal and the institutional background of Somalia has served to get in the way of bringing gradual development in the oil and natural gas sector
The researcher also tried to evaluate or investigate the institutions within the country along with finding out the scarcity of these institutions have exacerbate the capabilities for the resource exploration phenomenon to be undertaken in Somalia
The infrastructural and security services in the country is still in its developing phase and hence have failed to serve towards the oil and gas industry, especially during oil exploration process
Along with these features, the research also highlights the Resource curse affiliated phenomenon of rent seeking behaviour and corrupted agencies and authorities in Somalia
After highlighting these factors, the study reached its conclusion and the paper particularly highlights that the upstream oil and gas exploration in Somalia is still not yet up to the mark. Even the oil and gas exploration process is neither feasible in terms of short and medium term outcomes. Rather, for Somalia, it is highly advisable and recommended that in order to earn profit from such a crucial industry like oil and gas (energy), the institutional security and the issues related with corruption must be addressed. Corruption and institutional security issues have stunted or blocked the path of progress of upstream oil and gas exploration in Somalia for more than couple of decades or more.
The most recent case of Soma oil is one of the clear illustration or example of the journey that Somalia had to wait before a successful oil and gas exploration activity or production process came into being that has the capability to derive benefits to the stakeholders of the project. The rise of the civil war along with the militancy did not prevent other oil and gas industry to collaborate with Somalia oil and gas. In spite of associated with various illegal practices of cutting oil deals, ministers in Somalia did not impose any particular law to prevent the illegal activities. Many of the investors have been looking forward to rebuild the abundant natural resources for the enhancements of the economies. However, the government even has to face some of the potential challenges in regards to such inefficiencies. The government of Somalia is not capable enough for taking the participation in the certification schemes. It is quite essential for providing the authentic documentation that is enabling business tell the products worldwide. It is to be noted that Somalia does not capture any place in the regional economic blocs. Moreover, the number of the formal trades is very less in comparing to other nations. It has been seen that both the EU and US have signed the trade agreements with Somalia oil and gas industries in spite of not being the member of World Trade Organization.
One of the major obstacles that the Somalia economy has been facing is the restoration of the credibility in Somalia’s currency. The central bank has identified that the establishment of the unified currency would be one of the effective strategic opportunity to develop the economic structure. Therefore, it is much important to keep the focus on the maintenance of oil dealings. The Somalia oil and gas industry needs to concentrate on the social engagement as well for ensuring the economic growth and benefits for the people. It is quite helpful in foreign investment growth. However, the imposed regulations of the government needs to be much polished and rectified in order to develop the economic structure of Somalia oil and gas industry.
Now highlighting the limitations of this research, it is found that availability of valid and purposeful data is limited that limited the scope of the study. Somalia has been suffering from civil war for years hence; it is quite difficult to rely on the statistical data and records gathered during the period. Another limitation of the research was time factor, time constraint along with availability of fewer budgets also narrowed down the scope of the study. It could have been more interesting if the research topic was further explored by conducting semi-structured interviews with the major stakeholders starting from government officials, organizations, and common people as well.
During the conduction of the research study, the researcher had to face several potential limitations that affected the research process. The very first limitation is highlighting the issues with the budgetary factor for conducting the entire research. The budgetary issues are much prominent, because it is not possible for the researcher to meet the government ministry of Somalia personally. The participants for the interview sessions are not provided with the travel costs. Therefore, it is quite difficult for the researcher to conduct the semi-structured interview session for gathering the primary information. This is mainly focusing on the limitation of conducting the primary data. Therefore, the study is mainly depended on the secondary researches.
In addition, the lack of data on Somalia is also one of the most significant issues faced by the researcher during the conduction of this research study. More specifically, the data on the oil and gas industry of Somalia is very much limited. Since, the continuation of the civil war for two decades is responsible for the lack of reliable statistics; the researcher faced the potential challenges in tracing the data for the research purposes. The time limitation is also considered as the issue that affected the research study. If the researcher had enough time to complete the entire research conduction, the study would have contained more information related to the subject matter. Due to lack of sufficient time, the study is quite incomplete and many of the segments have not been discussed. The pressure of the deadline made the research study somewhat incomplete.
The research study has been very much promising for the researcher. However, the conduction of this particular research study helped the researcher in generating more self-confidence to deal with the stagnant situations. However, the research study can generate the idea for the future similar studies. The future researchers can get the idea of the related subject matter for the future research conduction. The research information incorporated in this particular research study can be utilized as the secondary sources for the future use. The similar references can complete the structure of the research. Moreover, the future researchers can generate the ideas regarding the challenges and issues that may arise during the conduction of the research. However, utilization the appropriate sources and information can be useful in specifying the variables underpinned the subject matter. Thus, it can be inferred that this research study is very much helpful in considering the future prospects of the similar subject.
Adam, C., 2015. 24. Tanzania: Turning Natural Gas into Sustained Growth.AFRICA at a Fork in the Road, p.415.
Affi, L.A., Elmi, A.A. and Mohamed, S., 2015. Avoiding Somalia: what prevents onshore solutions to piracy?. Global Affairs, 1(3), pp.305-314.
Ahali, A.Y.E. and Ackah, I., 2015. Are They Predisposed to the Resources Curse? Oil in Somalia. International Journal of Energy Economics and Policy, 5(1), p.231.
Anthony, R., 2013. Infrastructure and influence: China’s presence on the coast of East Africa. Journal of the Indian Ocean Region, 9(2), pp.134-149.
Balikuddembe, J.K. and Ardalan, A., 2014. Disaster risk management and oil production in Uganda.
BBC News, 2016. Somalia oil exploration: Drilling begins in Puntland – BBC News. [online] Available at: <https://www.bbc.com/news/world-africa-16600649> [Accessed 15 Feb. 2016].
Bridge, G. and Le Billon, P., 2013. Oil. John Wiley & Sons.
Brown, D.E., 2014. Africa’s Booming Oil and Natural Gas Exploration and Production: National Security Implications for the United States and China. Lulu. com.
Bruni, J., 2014. The Gulf and Asian Energy Requirements: Secure Supply or Oil on the Water?.
Bruton, B.E., 2014. Somalia: A new approach (No. 52). Council on Foreign Relations.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Campbell, D.T. and Stanley, J.C., 2015. Experimental and quasi-experimental designs for research. Ravenio Books.
Cederman, L.E., Gleditsch, K.S. and Buhaug, H., 2013. Inequality, grievances, and civil war. Cambridge University Press.
Chasek, P.S., Downie, D.L. and Brown, J., 2013. Global environmental politics. Westview Press.
Chattopadhyay, A., Martin, I.T. and Stearn, J.E.F., 2015, November. Frontier Exploration along East African Continental Margin: Key Challenges for Finding more Oil than Gas. In First EAGE Eastern Africa Petroleum Geoscience Forum.
Clayton, G., 2015. Oil, relative strength and civil war mediation. Cooperation and Conflict.
Creswell, J.W., 2013. Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.
Crouch, C. and Pearce, J. 2012 Doing Research in Design – Page 68, 2nd ed. London: Bloomsbury Publishing Plc.
Cust, J. and Harding, T., 2014. Institutions and the location of oil exploration.OxCarre Research Paper, 127.
Cust, J. and Harding, T., 2014. Institutions and the location of oil exploration.OxCarre Research Paper, 127.
Davis, D. F., Golicic, S. L., and Boerstler, C. N. 2011. Benefits and challenges of conducting multiple methods research in marketing. Journal of the Academy of Marketing Science, 39(3), 467-479.
Devine, R. and Severova, A., 2015. Bargain hunting in the low oil price environment: ten key issues to consider in bidding for hydrocarbons in new frontiers. The Journal of World Energy Law & Business, p.jwv018.
Devine, R. and Severova, A., 2015. Bargain hunting in the low oil price environment: ten key issues to consider in bidding for hydrocarbons in new frontiers. The Journal of World Energy Law & Business, p. 18.
Elo, S., Kääriäinen, M., Kanste, O., Pölkki, T., Utriainen, K. and Kyngäs, H., 2014. Qualitative content analysis. SAGE open, 4(1).
Garcia, A.V.T., 2014. The (non)-Impact of Democracy on Levels of Political Risk. An Evaluation of the Relationship between Levels of Democracy and the Political Risk facing the Oil and Gas Industry in Angola (Doctoral dissertation, Stellenbosch University).
Garcia, A.V.T., 2014. The (non)-Impact of Democracy on Levels of Political Risk. An Evaluation of the Relationship between Levels of Democracy and the Political Risk facing the Oil and Gas Industry in Angola (Doctoral dissertation, Stellenbosch University).
Grünewald, F., 2012. Aid in a city at war: the case of Mogadishu, Somalia. Disasters, 36, pp.S105-S125.
Gure, F., Yusuf, M. and Foster, A.M., 2015. Exploring Somali women’s reproductive health knowledge and experiences: results from focus group discussions in Mogadishu. Reproductive health matters, 23(46), pp.136-144.
Habiyaremye, A. and OÄŸuzlu, T., 2014. Engagement with Africa: Making Sense of Turkey’s Approach in the Context of Growing East-West Rivalry”.Uluslararası Ä°liÅŸkiler, 11(41), pp.65-85.
Hamlin, J., 2014. A Spatial Analysis of African Oil and Gas Infrastructure Security.
Hammond, L., 2013. Somalia rising: things are starting to change for the world’s longest failed state. Journal of Eastern African Studies, 7(1), pp.183-193.
Hassan, A., 2013. Review of the global oil and gas industry: a concise journey from ancient time to modern world. Petroleum Technology Development Journal 3 (2).
Hawken, P., Lovins, A.B. and Lovins, L.H., 2013. Natural capitalism: The next industrial revolution. Routledge.
Hesse, B.J., 2013. Somalia: State collapse, terrorism and piracy. Routledge.
Hesse-Biber, S. N, 2012 Mixed Methods Research: Merging Theory With Practice, 3ed ed. New York: Guilford Publications
Hills, A., 2014. Does police work need a police institution? The evidence from Mogadishu. Policing and Society, pp.1-18.
Hills, A., 2014. Somalia works: Police development as state building. African Affairs, p. 68.
Intawong, A. and Berryman, J.B., 2015, On-shore and Off-shore Exploration History and Discoveries to Date. In First EAGE Eastern Africa Petroleum Geoscience Forum.
Irinnews.org, 2014. Five challenges for Somalia’s economic reconstruction. [online] IRIN. Available at: <https://www.irinnews.org/report/99647/five-challenges-somalia%E2%80%99s-economic-reconstruction> [Accessed 8 Apr. 2016].
Kanareykin, V., 2015. Converters of phase shift for information and measuring systems of the oil and gas industry. Ogbus, (6), pp.443-466.
Keil, K., 2014. The Arctic: A new region of conflict? The case of oil and gas.Cooperation and Conflict, 49(2), pp.162-190.
Kessides, I.N., 2014. Powering Africa׳ s sustainable development: The potential role of nuclear energy. Energy Policy, 74, pp.S57-S70.
Khadiagala, G.M., 2015. Global and Regional Mechanisms for Governing the Resource Curse in Africa. Politikon, 42(1), pp.23-43.
Lameck Kibikyo, D. and Omar, I., 2012. Remittances Effect on Poverty and Social Development in Mogadishu, Somalia 2009. M2ECONOMICS, 1(1), pp.1-11.
Lanteigne, M., 2013. Fire over water: China’s strategic engagement of Somalia and the Gulf of Aden crisis. The Pacific Review, 26(3), pp.289-312.
Le Billon, P., 2013. Fuelling war: natural resources and armed conflicts (No. 373). Routledge.
Ledesma, D., 2013. East Africa Gas–potential for export. Oxford Institute for Energy Studies.
Limo, I. and Muna, W., 2015. Challenges of Relationships and Social Identities: The paradox of the consequences of Kenya’s military intervention in Somalia. The New African Civil-Military Relations, p.99.
Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Routledge.
Marriott, J. and Minio-Paluello, M., 2014. The political and material landscape of European energy distribution: Tracking the oil road. Theory, Culture & Society, 31(5), pp.83-101.
Maystadt, J.F. and Ecker, O., 2014. Extreme Weather and Civil War: Does Drought Fuel Conflict in Somalia through Livestock Price Shocks?. American Journal of Agricultural Economics, p. 10.
McDonald, C., 2013. Which countries are the most and least corrupt?. Risk Management, 60(10), p.16.
Menkhaus, K., 2013. Somalia: State collapse and the threat of terrorism (No. 364). Routledge.
Merrow, E., 2012. Oil and Gas Industry Megaprojects: Our Recent Track Record. Oil and Gas Facilities, 1(02), pp.38-42.
Mohamoud, M.A., 2015. Federalism for Somalia: Internal and External Challenges in the Post-Transitional Period.
Morris, M. and Fessehaie, J., 2014. The industrialisation challenge for Africa: Towards a commodities based industrialisation path. Journal of African Trade, 1(1), pp.25-36.
Morrison, J., 2014. Different organizations and the social license. In The Social License (pp. 133-149). Palgrave Macmillan UK.
Nazari, J.A., Herremans, I.M. and Warsame, H.A., 2015. Sustainability reporting: external motivators and internal facilitators. Corporate Governance,15(3), pp.375-390.
News24, 2015. British oil company probed for corruption in Somalia. [online] Available at: <https://www.news24.com/Africa/News/British-oil-company-probed-for-corruption-in-Somalia-20150804> [Accessed 17 Feb. 2016].
Nickels, B., 2015. Al-Shabaab in Somalia: The history and ideology of a militant Islamist group, 2005–2012. Dynamics of Asymmetric Conflict, 8(3), pp.191-193.
Obi, C., 2014. Oil and conflict in Nigeria’s Niger Delta region: Between the barrel and the trigger. The Extractive Industries and Society, 1(2), pp.147-153.
Olawuyi, D.S., 2015. Legal strategies and tools for mitigating legal risks associated with oil and gas investments in Africa. OPEC Energy Review,39(3), pp.247-265.
Omeje, K., 2016. Natural resource rent and stakeholder politics in Africa: towards a new conceptualisation. Commonwealth & Comparative Politics, pp.1-23.
Palmer, A., 2014. The New Pirates: Modern Global Piracy from Somalia to the South China Sea. IB Tauris.
Panagiotis, S.I. and Georgia, P., 2013. Transportation of Energy Resources in the Middle East and Central Asia. International Journal of Energy Economics and Policy, 3, p.127.
Pishdad, A., Haider, A. and Koronios, A., 2012. Technology and Organizational Evolution: An Institutionalisation Perspective. Journal of Innovation and Business Best Practices, pp.1-12.
Pollet, B.G., Staffell, I. and Adamson, K.A., 2016. Energy and Africa. In The Energy Landscape in the Republic of South Africa (pp. 3-12). Springer International Publishing.
Reflective-essay.org, 2012. What Is a Reflection Paper?. [online] Reflective Essay. Available at: <https://reflective-essay.org/what-is-reflection-paper/> [Accessed 11 Apr. 2016].
Reitano, T. and Shaw, M., 2013. Peace, politics and petroleum in Somalia.African Affairs, p.adt064.
Ross, M., 2012. The oil curse: how petroleum wealth shapes the development of nations. Princeton University Press.
Saunders, M. N., Lewis, P. and Thornhill, A. 2009 Research methods for business students, Page 52, 5th ed. Harlow: Prentice Hall
Savitzky, S. and Urry, J., 2015. 11 Oil on the move. Cargomobilities: Moving Materials in a Global Age, p.180.
Smith, B., 2015. The resource curse exorcised: Evidence from a panel of countries. Journal of Development Economics, 116, pp.57-73.
Somalilandpress.com, 2015. Federalism for Somalia. [online] Somalilandpress.com. Available at: <https://www.somalilandpress.com/federalism-somalia/> [Accessed 8 Apr. 2016].
Sovacool, B.K., 2016. Countering a corrupt oil boom: Energy justice, Natural Resource Funds, and São Tomé e Príncipe’s Oil Revenue Management Law.Environmental Science & Policy, 55, pp.196-207.
Stevens, P., Lahn, G. and Kooroshy, J., 2015. The Resource Curse Revisited. Research Paper, Chatham.
Su, F., Wei, G. and Tao, R., 2016. China and Natural Resource Curse in Developing Countries: Empirical Evidence from a Crossâ€Âcountry Study.China & World Economy, 24(1), pp.18-40.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.
Urciuoli, L., Mohanty, S., Hintsa, J. and Gerine Boekesteijn, E., 2014. The resilience of energy supply chains: a multiple case study approach on oil and gas supply chains to Europe. Supply Chain Management: An International Journal, 19(1), pp.46-63.
Validity and reliability of the experience-sampling method. In Flow and the Foundations of Positive Psychology (pp. 35-54). Springer Netherlands.
Vasquez, P.I., 2013. Kenya at a Crossroads: Hopes and Fears Concerning the Development of Oil and Gas Reserves. International Development Policy| Revue internationale de politique de développement, (4.3).
West, S., 2014. The Decommissioning of Offshore Oil and Gas Installations and Structures in Nigeria and South Africa in the context of international best practices (Doctoral dissertation, University of Cape Town).
Wilson, T., 2016. Economic Recovery in Somalia. Bildhaan: An International Journal of Somali Studies, 15(1), p.9.
Windsor, D., 2013. 11. Impact of the geopolitical distribution of corruption and crime on the global corporation. Handbook on the Geopolitics of Business, p.151.
Woertz, E., 2013. Oil for food: the global food crisis and the middle east. Oxford University Press.
Yang, L., Takase, M., Zhang, M., Zhao, T. and Wu, X., 2014. Potential non-edible oil feedstock for biodiesel production in Africa: A survey. Renewable and Sustainable Energy Reviews, 38, pp.461-477.
Yin, R.K., 2013. Case study research: Design and methods. Sage publications.
Zongying, Z.H.O.U., Ye, T.A.O., Shujun, L.I. and Wenlong, D.I.N.G., 2013. Hydrocarbon potential in the key basins in the East Coast of Africa.Petroleum Exploration and Development, 40(5), pp.582-591.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download