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Friday, August 10, 2007

Deadly Battle for Oil and Gas

Chicago Tribune -- Petroleum nearly killed Eskedar Demissew. Or at least the illusion of it did.

In the predawn gloom of a morning in April, insurgents rousted the stocky truck driver from his tent at a remote oil prospecting camp in Ethiopia's Ogaden desert. They lined him up in the sand with other workers. And without further ceremony, they sprayed them with machine-gun fire.

Demissew survived, just barely, by playing dead. But 74 other people, including nine Chinese contractors, died in one of the worst attacks on an African oil facility in recent memory.

"I will never work in oil again," Demissew said quietly at his tiny house in the Ethiopian capital, Addis Ababa, where he was popping painkillers and hoping to regain full use of his nerve-damaged arms. "It isn't worth it."

Unfortunately, when it comes to getting shot over disputed energy resources, that's especially true for the Ogaden, where little oil actually has been found.

Indeed, while lucrative pools of crude have inflamed conflicts in Nigeria and elsewhere in Africa, even the merest promise of oil wealth -- most of it tragically overblown -- is stoking violence in the arid wastes of eastern Ethiopia, one of the poorest corners of the world and home to a secessionist movement that has been bubbling for decades.

Rebels with the Ogaden National Liberation Front have added oil operations to their usual targets of army convoys and police stations in the Ogaden, warning all foreign companies not to steal "the mineral resources of our people" on pain of further guerrilla attacks. At the same time, Ethiopia's government has assured exploration firms that recent security crackdowns in the region have again made prospecting safe. And local conspiracy theorists now hold that the ugly civil war in the Ogaden is heating up only because the U.S. and China are vying over its hydrocarbon riches.

All of which is belied by a startling fact: Today there isn't a single functioning oil field in the Ogaden, a tract of scrubland the size of Nebraska near the Somalia border. Most of the wells drilled to date have been dry holes. Natural gas is another matter: Exploitable reserves abound. But even this relatively modest bonanza is many years away from profitable development, experts say, because of the area's profound isolation and instability.

"You've heard about resource wars, right?" said a geologist in Ethiopia familiar with that nation's energy potential. Asking not to be named because of the political sensitivity of the issue, he added, "Well, this one involves an unusual resource. It's called imaginary oil."

The main trouble in the Ogaden doesn't involve squabbling over supplies of black gold.

Ogadeni insurgents have been battling for independence from Ethiopia since 1984, complaining of discrimination by the central government against the region's Somali-speaking nomads.

In recent months the rebels have accused the federal army of mass rapes, torching villages and withholding food aid in the famine-prone region. Ethiopia angrily denies the charges.

But in response to the spectacular rebel attack on the Chinese-run Abole exploration project on April 24, some of the war's bitterest rhetoric has involved the ownership of the Ogaden's underground wealth. And grossly exaggerated notions regarding the size of that bounty -- whether it be used to bankroll a future Ogaden state or alleviate poverty in a unified Ethiopia -- have only complicated a seemingly intractable civil war, analysts say.

"It is my opinion that oil will eventually contribute significantly to the country's economy," Alemayehu Tegenu, Ethiopia's minister of Mines and Energy, predicted in an interview. "We need three or four more years of exploration to fully understand our potential. After that, I see oil as a unifying force."

But many residents of Ethiopia's Ogaden beg to differ.

"The oil is under our land," insisted Kadija, a wizened trader from the dusty Ogaden capital of Jijiga who was too worried about government reprisals to share her full name. "These foreign companies should be giving money to our Somali elders. They should be building schools here."

In fact, there simply is no oil money to give out.

According to industry reports, some of the Ogaden's rock formations match those found across the Red Sea in oil-sodden Saudi Arabia. But years of drilling, some by American companies, have proved disappointing. The U.S. Energy Information Administration says that Ethiopia can muster a paltry 428,000 barrels of estimated crude reserves -- what neighboring Sudan exports every 24 hours.

The real prize in the poverty-stricken country seems to be natural gas, experts say. An estimated 4 trillion cubic feet worth of gas has drawn large companies such as Malaysia's Petronas and Sweden's Lundin to the volatile and nearly roadless Ogaden. Chinese subcontractors do much of the prospecting.

All the activity in the Ogaden is part of a new hunt for oil in Northeast Africa, industry analysts say.

Exploration projects are under way in such improbable oil sources as Uganda, Kenya, Djibouti, Eritrea and even war-racked Somalia. Contrary to local gossip, the volumes of potential reserves involved haven't attracted American or Chinese oil majors, which are wrestling for access to bigger subsurface treasures elsewhere in Africa, mainly Nigeria and Angola.

The snooping in Africa's Horn is spurred mostly by energy nationalism locking up supplies on other continents, experts say. Yet that hasn't stifled wild expectations that oil will yank some of the world's poorest nations out of misery.

"It seems like a buzz, but we're really just turning over stones at this stage," said an executive in Addis Ababa who refused to be identified because Ogaden rebels were making death threats against some oil companies. "With Russia and the Middle East closed off to us, we're working around the margins."

Mitchell noted that the Falklands War between Britain and Argentina was stoked in part by murky reports of offshore oil -- reserves that remain untapped to this day. And theoretical crude deposits in the high Arctic are now causing friction between Russia and its circumpolar neighbors, he said.

On Thursday, a Russian submarine dropped a flag onto the seabed at the North Pole in a gesture meant to strengthen its claim over potential oil supplies hidden away there. With global warming melting the northern ice cap, the Arctic is drawing the energy-hungry gaze of several nations.

In Ethiopia, Demissew, the wounded truck driver, said he could not care less whether his abandoned oil prospect produced anything. With three bullet holes in his body, he considered himself lucky to be alive. Most of his tent-mates, he said, were dead.

"Nobody told us the company had been warned by the rebels," he said, cradling a useless arm in his lap.

Back in the Ogaden, meanwhile, industry sources said that Demissew's former employers were already replacing the oil camp vehicles and generators destroyed during the rebel attack.

Hope and death spring eternal in the Ogaden, it seems, even when oil doesn't.

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