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COLUMN ONE : The Oil Factor in Somalia : Four American petroleum giants had agreements with the African nation before its civil war began. They could reap big rewards if peace is restored.

January 18, 1993|MARK FINEMAN | TIMES STAFF WRITER

"In the oil world, Somalia is a fringe exploration area," said one Conoco executive who asked not to be named. "They've overexaggerated it," he said of the geologists' optimism about the prospective oil reserves there. And as for Washington's motives in Somalia, he brushed aside criticisms that have been voiced quietly in Mogadishu, saying, "With America, there is a genuine humanitarian streak in us . . . that many other countries and cultures cannot understand."

But the same source added that Conoco's decision to maintain its headquarters in the Somali capital even after it pulled out the last of its major equipment in the spring of 1992 was certainly not a humanitarian one. And he confirmed that the company, which has explored Somalia in three major phases beginning in 1952, had achieved "very good oil shows"--industry terminology for an exploration phase that often precedes a major discovery--just before the war broke out.

"We had these very good shows," he said. "We were pleased. That's why Conoco stayed on. . . . The people in Houston are convinced there's oil there."

Indeed, the same Conoco World article that praised Conoco's general manager in Somalia for his role in the humanitarian effort quoted Marchand as saying, "We stayed because of Somalia's potential for the company and to protect our assets."

Marchand, a French citizen who came to Somalia from Chad after a civil war forced Conoco to suspend operations there, explained the role played by his firm in helping set up the U.S.-led pacification mission in Mogadishu.

"When the State Department asked Conoco management for assistance, I was glad to use the company's influence in Somalia for the success of this mission," he said in the magazine article. "I just treated it like a company operation--like moving a rig. I did it for this operation because the (U.S.) officials weren't familiar with the environment."

Marchand and his company were clearly familiar with the anarchy into which Somalia has descended over the past two years--a nation with no functioning government, no utilities and few roads, a place ruled loosely by regional warlords.

Of the four U.S. companies holding the Siad Barre-era oil concessions, Conoco is believed to be the only one that negotiated what spokesman Geybauer called "a standstill agreement" with an interim government set up by one of Mogadishu's two principal warlords, Ali Mahdi Mohamed. Industry sources said the other U.S. companies with contracts in Somalia cited " force majeure " (superior power), a legal term asserting that they were forced by the war to abandon their exploration efforts and would return as soon as peace is restored.

"It's going to be very interesting to see whether these agreements are still good," said Mohamed Jirdeh, a prominent Somali businessman in Mogadishu who is familiar with the oil-concession agreements. "Whatever Siad did, all those records and contracts, all disappeared after he fled. . . . And this period has brought with it a deep change of our society.

"Our country is now very weak, and, of course, the American oil companies are very strong. This has to be handled very diplomatically, and I think the American government must move out of the oil business, or at least make clear that there is a definite line separating the two, if they want to maintain a long-term relationship here."

Fineman, Times bureau chief in Nicosia, Cyprus, was recently in Somalia.

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