- The Dublin-based company Island Oil & Gas plc on Tuesday announced an onshore oil exploration deal in occupied Western Sahara that it had signed with the Moroccan occupying power. Protests against the "illegal deal" already are formulated, and the Irish company now risks being targeted by a divestment campaign that earlier has succeeded in making all foreign oil companies withdraw from Moroccan-controlled Western Sahara.
Island Oil on Tuesday announced its freshly signed exclusive reconnaissance contract for the onshore "Zag Basin" in northern Western Sahara, including a fringe of southernmost Morocco, granted by Morocco's Oil and Mines Ministry (ONHYM). The licence, which is valid for a period of 12 months until December 2007, covers an area of 21,807 square kilometres, including the outskirts of the Sahrawi town S'mara.
"The work programme that has been committed to comprise geological field studies; a geochemical study; the processing and interpretation of gravity and magnetic data; and the interpretation of satellite data," according to the Irish oil company's statement. The joint venture partners in the licence are Morocco's San Leon (50%), the designated operator; GB Oil and Gas Ventures (30%); and Island Oil & Gas (20%).
The "Zag Basin" - which the company placed "in Morocco" - is said to be an under-explored Palaeozoic North African sedimentary basin within which no seismic data have been acquired to date. Wells drilled by the Spanish colonial power in the 1960's however encountered gas shows in the basin's sandstones, with surface oil shows also observed. "An active petroleum system is believed to be present in this basin based on the early drilling history," Island Oil says.
This is also the belief of the exiled government of the Sahrawi Arab Democratic Republic (SADR) - which is recognised as an independent state by the majority of Africa's nations. Also the SADR has its licensing agency, which defines "the Zag Basin" as part of its Bir Lahlou and S'mara onshore blocks, has formally announced "the commencement of an onshore licensing initiative to enable international oil and gas companies to participate in the exploration of its onshore sovereign territory."
For some of its offshore blocks, the Sahrawi agency has already recruited foreign companies like Premier Oil and Comet Oil. These companies agree to wait until the SADR government has recovered control of its territory before exploring and exploiting the presumably immense oil resources off the Sahrawi coast.
Other companies did not want to wait until the political deadlock on Western Sahara's future is resolved, and several jumped into questionable deals with the occupying power to explore the promising Sahrawi waters. During the last five years, TGS-Nopec, Fugro NV, Thor Offshore, Total, Kerr-McGee, Wessex Exploration and Pioneer Natural Resources have mapped in particular the offshore Aaiun Basin in cooperation with Moroccan authorities.
A UN legal opinion issued by Hans Corell in January 2002 however found that exploration operations in an occupied territory were legally questionable - probably even contrary to international law - is the territory's indigenous population did not agree with them of profit from them. Exploitation of possible oil resources would clearly be illegal, the UN opinion said. Following SADR protests, the UN also held that such operations would jeopardise its efforts to seek lasting peace between Morocco and the SADR.
Pro-Sahrawi campaigner since then have assisted the SADR in making the case known and urged investors to avoid companies that "illegally" explore or exploit natural resources. A large divestment campaign brought many of the companies on their financial knees, especially as the campaigners achieved blacklisting them on ethical grounds. Major funds - such as the Norwegian Pension Fund, the world's largest - divested out of ethical reasons.
The latest company to withdraw from the area was Kerr-McGee, in April this year, after it had lost shareholders for a total of US$ 80 million. Kerr-McGee operated what the Moroccan government calls the "Boujdour Block" in the offshore Aaiun Basin, and its withdrawal made minor partner Pioneer Natural Resources give up on the block. Now, only the minor Dallas-based Kosmos Energy remains on the "Boujdour Block". The company was given a widened licence by Moroccan authorities, but is considered too small and cash-strapped to be able to actively operate the offshore block, where works now are close to paralysed.
Island Oil is the first foreign company to enter onshore oil exploration in occupied Western Sahara in cooperation with Moroccan authorities and companies. The move provoked - but mostly surprised - activists and SADR officials, as the area Island is to explore is both heavily militarised and the company has its key investments in countries that are strongly attached to the Sahrawi cause.
"We note ... that your company ... pursues opportunities in third countries, such as Libya, the Netherlands and East Timor, all of them strongly in favour of self-determination for the Sahrawi people," Carlos Wilson of Western Sahara Resource Watch says in a letter to Island Oil. East Timor "was itself under foreign occupation for 24 years, and has extensive diplomatic relations with the SADR. We also know that you have several licences offshore Ireland, a country that has consistently pronounced itself in favour of the Sahrawi people's legitimate claim to self-determination," the open letter goes on.
The organisation - which stood behind the divestment campaigns against the other companies operating in occupied Western Sahara - questions whether the Irish oil company has properly understood its new engagement. "The zone in which your company has selected to carry out your operations is ... located just adjacent to the wall that the Moroccan forces constructed during the 1980s. The area is believed to have one of the world's highest densities of landmines, and tens of thousands of Moroccan soldiers patrol the area. The licence also seems to cover areas in the vicinity of S'mara, a town that has seen repeated clashes between Moroccan police and civilian Sahrawis."
While not threatening to launch a divestment campaign as yet, Mr Wilson urges company representatives to meet with activists for "an open and frank dialogue". But at the same time, he demands "a public statement before the end of the year" announcing Island Oil's withdrawal from the deal. The campaigners have the best contacts among the Irish, Dutch and Timorese governments, so a divestment campaign could have quick and striking successes, insiders told afrol News.
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