Somaliland Ministry of Energy & Minerals Seven Years Achievements

Somaliland Ministry of Energy & Minerals Seven Years Achievements

 

The Ministry of Energy & Minerals of the Republic of Somaliland (Ministry) is mandated to develop Somaliland’s energy and mineral resources in an environmentally responsible and sustainable way for the benefit of its people. These include the development of hydrocarbons, hard minerals, renewable energy and efficient power generation.

Eng. Hussein Abdi Dualeh was appointed by President Ahmed Silanyo in August 2010 as the Minister of Mining, Energy & Water Resources. In mid-2013, the President decreed the establishment of a new water resources Ministry and the existing Ministry’s name was changed to the Ministry of Energy & Minerals (MOEM).

For the past the seven years, the Ministry was under the leadership of Eng. Hussein Abdi Dualeh, a USA educated and trained Petroleum Engineer. During his tenure, Eng. Dualeh has devoted a good deal of his time in advancing Somaliland’s goal to develop and exploit its natural resources.

When water resource management was part of the Ministry’s responsibility during the first 3 ½  years of service, the Ministry under the leadership of Eng. Dualeh achieved the passing of a National Water Act, the completion of a national hydrogeological survey, the drilling of 50 plus boreholes for both urban and rural communities and the successful delivery of the largest water infrastructure project in Somaliland funded by the EU to primarily upgrade the nation’s capital (Hargeisa) municipal water supply system.

Somaliland’s geology has a good potential in the formation of oil and gas in its basins and it has all the indications to contain commercial oil reserves that can propel it to become an oil producing country in the not too distant future.  Since 2010, the Ministry made major strides in marketing Somaliland’s petroleum potential and attracted international oil companies to operate in Somaliland despite as a state it lacks international recognition and is considered a frontier area for oil exploration. In order to attract foreign investment and financing commitments to Somaliland’s petroleum sector, the Ministry initiated the development of a new Petroleum Policy and a legal framework that include an Upstream Petroleum Bill and a Petroleum Revenue Bill, both of which are pending with the Legislature to be enacted into law. As a result of issuing new oil exploration licences and farming in qualified international oil companies, the Ministry was able generate nearly $6 million US dollars in revenue for the government in the form of signature bonuses and land rent.

Currently there are four international oil companies who have production sharing agreements (PSA) with the government of Somaliland (Genel Energy, RAK Gas, DNO and Ansan).  These companies have conducted various types of exploration surveys including geological, geophysical, oil seepage analysis as well as environmental impact assessments. Three of these companies are also taking part in a major multi-client 2-D seismic acquisition project in which the Ministry is managing and provides the data to the oil companies through data purchase agreements. The Ministry contracted with BGP Inc, a Chinese company and one of the leading exploration service companies in the world to conduct 3,000 km of 2-D seismic survey on the Genel Blocks with an additional 1,800 km to be acquired on the RAK Gas and DNO blocks in 2018.This 2-D seismic project that is happening in Somaliland is currently the largest its kind in all of Africa!

The first stage of this seismic project commenced in Genel blocks (Blocks SL6. SL7a, SL10 and SL13) in November 2016. The project ran into major challenges in the initial stages. These challenges were mainly community related and were solved by a comprehensive and effective community engagement carried out by the Ministry with the support of the local authorities and other stakeholders. It is great honour and credit for Somaliland government and the Ministry in particular that this project has proven to be highly successful and will be completed in few weeks (January 2018). The data obtained from 3,000km of 2-D seismic lines has already been through the first phase of processing and interpretation and is now being processed and interpreted further to identify drilling prospects. Planning for and drilling the first exploratory wells in the Genel blocks is expected to begin in the second half of 2018 and could go through the end of 2019.

RAK Gas is presently conducting 17,000km Full Tensor Gravity survey (airborne survey) on its blocks (SL9 and SL12). The Ministry is also currently finalising the seismic project contract with RAK Gas which is part of the Ministry run multi-client 2-D seismic project. The contract is now at the final stage and should be signed next week and will be followed by the commencement of the seismic acquisition activities sometime in early January 2018.

DNO (a Norwegian company which holds the contract of block SL18) is also committed to join the Ministry implemented multi-client seismic project and will follow RAK Gas. Significant progress has already been made on the DNO seismic project contract negotiation and it is expected to be finalised sometime in early 2018.

Apart from the long-term goals and benefits that associate with finding commercial oil, there are number of short term benefits for the local community and for the nation in implementing this oil exploration projects. For instance, in the current Genel project there are over 400 direct employment positions that were created for the local communities, capacity building for the Ministry staff and technical training and skill development for nationals working in the project. There are also various community development projects in the exploration areas. The oil companies that the Ministry is conducting this work on their behalf have also contributed generously last year to the draught relief effort.

As to the Mineral sector, Somaliland is characterized by a variety of minerals including; salt, industrial minerals such as cement materials, glass-making quality sand, gypsum and barite, precious and heavy metals and a numerous variety of gemstones. There is also a range of good quality decorative stones.

 

The Ministry has made significant progress in the development of the mining sector.  There were no qualified staff or experts in the Ministry before 2010.  The relationship between artisanal miners and the Ministry was poor and there was no up-to-date mining code and regulations.  Standard royalty and taxation for minerals were also lacking.

 

Since 2010 numerous geological studies have been conducted on industrial minerals as well as on precious metals. Currently there are local prospectors for precious minerals. The Ministry has put a system in place to facilitate and engage with the local prospectors, to educate them on safe extraction methods and proper identification of minerals. The Ministry has recently commissioned in house XRF laboratory which will help prospectors and researches to properly identify the variety of minerals in Somaliland.

 

Under the leadership of Eng. Hussein A. Dualeh, the companies such as Nubian Gold and African Resource Cooperation (ARC) were attracted to invest in the country. ARC proved a Beryl Ore deposit estimated at 500,000 tons in the Simodi Hills in the Awdal Region and entered into a mining agreement with the Somaliland government in 2014. Currently ARC operates a small mining operation that has yielded limited production. The Ministry also signed prospecting agreements with various companies from Turkey, Qatar and India to invest in Somaliland industrial minerals. The Ministry improved the standard of mineral dealer licence and quarrying licence for local companies and enhanced the taxation system. This resulted in an increase in the revenue generated for the government which is now estimated to average nearly a quarter of a million US dollars annually. In order to ensure investment and financing commitments for the mineral industry, the Ministry initiated the development of a new Mining Bill which is pending with the Legislature to be passed into law.

The Ministry made an equal effort in advancing the development of the Energy sector. Initially there was no regulatory framework to govern the sector. After the establishment of the Ministry of Energy and Minerals during the Silanyo Administration, the necessary policy and regulatory framework were developed. The Energy policy was approved in 2010 while the Somaliland Electrical Energy Bill was developed by the Ministry and is currently with the Legislature awaiting adoption into law.

The Ministry developed interim sets of regulations such as licensing, minimum technical health and safety standards and electrical power distribution network expansion guidelines. As a result of many workshops conducted by the Ministry and consultative meetings held for the private electricity service providers (ESPs), their level of education and awareness has increased and that resulted in the ESPs to merge to get economies of scale in order to provide better service to customers. The Ministry has also established a well-organized coordination mechanism among the Energy Sector stake holders to develop the institutional, regulatory as well as infrastructural requirements of the energy sector.

Under the Ministry’s direction and oversight, multiple energy programs are ongoing in the country that include a major program called Energy Security and Resource efficiency program (ESRES) funded by DFID. The main purpose of the ESRES project is to improve the access of affordable electricity for vulnerable communities through the promotion of renewable energy technologies. Choosing renewable energies for the project is based on the premise that green infrastructure investments in fragile states have potentially positive poverty reduction benefits while at the same time reducing the country’s vulnerability to the negative effects of climate change. The project entailed building six mini-grid projects in six Somaliland towns (Gabeley, Borama, Sheikh, Burao, Buhoodle, and Badhan) and was completed this year-2017. The project contributed a total of 2,700 KW of additional power to these towns resulting in adding 10,307 new connections. The project also created 487 positions of temporary and permanent employment.

 

With assistance from the UAE government, the Ministry was able to equip three government facilities, namely the Presidency, the Ministry of Energy & Minerals and the Ministry of Information with modern solar power systems that will meet the energy needs of these facilities at a major cost savings to the government.

 

Similarly, a 5-year USAID funded project termed Growth Economic Employment and Livelihood program (GEEL) is overseen by the Ministry and is designed to promote and facilitate inclusive economic growth in Republic of Somaliland. The project is currently focusing on supporting the agricultural sector, fisheries and renewable energy.

 

Another ongoing project managed by the Ministry, the Somaliland Energy Transformation Program (SET) funded by the EU targets isolated villages, in Somaliland. Targeted rural communities were supported with installation of solar powered pumping systems for shallow wells and boreholes, many schools and healthcare centres (MCHs) were also powered with Solar PV systems to provide electricity.

 

The Ministry is implementing a Power Master Plan for the entire country and in particular the capital city, Hargeisa. The objective of the Project which is funded by the World Bank is to produce credible power master plan for Somaliland to guide the introduction and establishment of modern cost-effective reliable electricity supply systems for the country over a 20-year planning period.

 

In the area of human resource development, the Ministry during Eng. Dualeh’ s tenure underwent major transformation that saw a complete restructuring of the Ministry departments, the establishment of a new Petroleum Directorate, a Planning Directorate, retiring aging leadership and appointing new dynamic highly educated and trained directors to head the departments. Human resource managing and development was beefed up by establishing a Human Resource Department that developed new human resource policies and procedures. Staff underwent numerous capacity building and training program to elevate their administrative, technical and management kills.

With these procedures in place, employees are now accountable of their time, individual performance is enhanced, Performance evaluations are done twice a year, and motivation, recognition and reward are done on quarterly basis.  The Ministry personnel procedures also allow supervisors to guide and manage employee performance throughout the year by creating job descriptions for all positions in the Ministry, by writing annual work plans for their departments and individual work plans for each staff member.

In accordance with the vision, mission and core values of the Ministry, each employee aspires to follow and fulfil the core values and competencies of the MOEM vision.  All these ministerial, departmental and individual work plans are meant to take us closer to the achievement of Ministry’s goals in the National Development Plan II.

with the establishment of a Planning Department that worked closely with the Ministry of Planning the Ministry succeeded in creating a new Energy and Extractive Sector which will be treated as a separate sector in the National Development Plan II (2017-2021).

The drastic improvement and progress that the Ministry has achieved during the past seven years under Minister Dualeh’ s leadership is highlighted by the modern state-of-the art new facility that houses the Ministry that was commissioned by President Silanyo in September 2016. The project was fully funded by the oil companies that have contracts with Somaliland under the direction and oversight of Minister Hussein Abdi Dualeh. The new facility is fully powered by a solar power system and is equipped with modern telecommunication network.

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