Somalia-Kenya border row: hard choices with oily interests at play

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Somalia has finally sought litigation over the maritime boundary   at the International Court of Justice in The Hague.

Last month, Kenya’s Foreign Affairs secretary Amina Mohammed told parliament that Somalia had agreed to pursue arbitration outside the United Nation’s highest court which was preparing to start hearing the suit.

“We have received a pledge from the Federal Government of Somalia indicating their readiness to withdraw a case   filed in New York against Kenya and pull out of case for us to resolve maritime boundary issues,” Ms. Mohammed said.

Kenya and Somalia have locked in a tussle over off-shore territory limits since a memorandum reached in 2009 that the border would run east along the line of latitude was rejected by Somalia parliament.

The fuel factor
The rich oil deposits play a huge role in the boundary tussle. Kenya was at one point accused of illegally allocating offshore oil and gas exploration blocks to multinationals Total and Anadarko in the waters where Somali claim concessions.

The maritime boundary lie in areas known as hot spots for oil and gas, a natural resource Kenya is keen at exploring after discovering similar deposits in her northern districts of Turkana.
Even though Kenya says it has continuously remained optimistic of reaching a deal with Somalia over the exploration of resources around a disputed section of   Indian Ocean off-shore border territory, Somalia had accused her of dishing out the oil reserves to explorers illegally.

Both countries have since submitted separate submissions to the UN agency seeking to claim additional territory on the shared Indian Ocean border.

Somalia had asked the International Court of Justice in The Hague to determine the maritime boundary between the two neighbors which disagree on the right to explore and collect revenue from oil discoveries.

Somalia had also filed a formal claim for a bigger chunk of the continental shelf at the UN Convention on the Law of the Sea (UNCLOS) based in New York. While Somalia wants the maritime border to continue along the line of the land border, to the southeast diagonally, Kenya wants the sea border to go in a straight east, a move which will grant her more sea territory.

Should the boundary be drawn the Somali way, Kenya will be left with a small triangle of the maritime belt of the Indian Ocean after losing over 100,000 square Kilometers of territorial waters, and without free access to the high seas. Such a decision will also see Kenya forego at least seven oil blocks it had offered explorers.

Kenya recently identified eight new offshore exploration blocks available for licensing, and all but one of them are located in the contested area.

Somalia has said the dispute risks deterring multinational oil companies from exploring for oil and gas offshore East Africa.

An agreement reached and deposited with the Law of the sea Commission in New York in 2011 following similar diplomatic negotiations was scuttled by Somalia’s parliament, setting the stage for the suit at the UN’s highest judicial body.

The agreement between Kenya and Somalia stated that the border would run east along the line of latitude, but Mogadishu, which has lacked an effective central government since1991, rejected the agreement through parliament.

Kenya relies heavily in energy reforms to propel her crucial economic turning point in its history. The two countries have attractive features in the potential to be giants in the lucrative oil and gas sector.

Save for the fact that Kenya has a stable government while Somali has not had a stable government since 1991; both countries have good ports to export crude oil. They both have the advantage of not being landlocked like South Sudan or Uganda hence the ability to export via the ocean.

Lack of refinery infrastructure

None of the two countries may however be able to carry out oil refineries if a recent report by audit firm PricewaterhouseCoopers is anything to go by.

The report on the Kenyan oil and gas sector say the attempt to process crude oil will be too expensive for the country which would rather export crude oil and import the processed products.

“The decision on whether or not there should be a refinery needs to be made not upon the approximate availability of crude oil but upon the fundamental crude supply options, the scale and breath of the local area demand, and the competitive outlook for refining in the region over the medium and longer term. Kenya has neither the scale nor the breath of secondary industries to economically justify an oil refinery, “says the report

The conflict between the two countries is therefore centered in the fact that both have a similar option and ambition to exploit the mineral through exporting crude oil and none depends on the pother to execute the plan since they both have the sea routes.

According to the UN Convention on the Law of the Sea, all countries that border the ocean are allowed to use the 200 nautical miles into the ocean for exclusive economic purposes without interference from other countries. Kenya has formally laid claim to an additional 103,320 square Kilometers of seabed off its coastline, beating an April 13, 2013 deadline that was set for the submissions.

Failure to beat the deadline would have left all exploration and exploitation rights over the territory in the hands of the International Seabed Authority (ISA). Failure to secure such rights would also mean that firms eying investments in such zones would have to go through strenuous and expensive processes to secure permission from the ISA.

Tanzania made a late claim in 2012 for its share of the Indian Ocean territory, delaying the commencement of proceeding to decide the demarcation of the extra seabed claimed by Kenya and Somalia.

Kenya, by virtue of sharing a common border with Tanzania, had to wait for Tanzania’s final submission to get the UN’s verdict on its application.

Kenya’s Ambitions;
Oil is central to Nairobi’  $25.5 billion commitment on the LAPSSET (Lamu Port, South Sudan, Ethiopia Transport and Economic Development Corridor) project aimed at connecting South Sudan, Ethiopia and Kenya through a series of ambitious infrastructure developments. Among these is an oil pipeline that will link South Sudan, and later on possibly Ugandan land-locked crude reservoirs, with the Kenyan port of Lamu, located on the Indian Ocean Manda Bay.

Will oil fuel the fire or will the Indian Ocean waters coll things outside the courts? That is a question many observers can oil watch sand wait.