Conflict Oil: Risky Business


This desert-covered land in northeast Africa has been fractured by warring tribal militias for 16 years. But if all goes well, Vancouver-based Canmex Minerals Corp. will be trucking a drilling rig through the countryside looking for oil deposits sometime next year, according to Schmitt, the company’s president and CEO. “Obviously, politically, it’s not the best place in the world to work,” he says. But that means opportunity for those brave enough to look for possible oil deposits, he adds. The company is working in Puntland, a semi-autonomous region in the north that has endured a comparatively small dose of the country’s troubles. “[There is] the occasional sporadic upwelling of dissent,” Schmitt admits, “but I don’t think it’s very different from many other countries in the region. In fact Puntland does seem to be a little island of stability in all that mess.” But while the area may seem calm now, the Puntland mineral game was marred by violence last spring, a year before Canmex became a part of the project. Fighters from a clan opposed to resource-industry plans clashed with government troops who were escorting an exploration team, according to Somali news agency Garowe Online. The team was working for Range Resources Ltd., an Australian company that secured exploration rights in 2005 and partnered with Canmex in March. Several deaths were reported, which Range executives have repeatedly denied. In an April 2006 editorial, Garowe Online declared this a sign of a new type of conflict in Somalia: “mineral wars.” Despite the dire predictions, Schmitt says the deal now appears to have the support of the regional government and the area’s clans. Getting more people to believe the area is safe will likely remain tricky. Canmex has set up an office in the northern city of Bossaso, staffed with a handful of experts who know the area from personal experience, and not just from media coverage, Schmitt says. The Canmex team is budgeting some extra time into their schedule in case “the area becomes difficult to operate in for short periods of time,” but Schmitt says he doubts they’ll need it. “Apart from that, there’s nothing really to build in contingencies for,” he says. “We can either do the work or we can’t. So we’ll see how it goes.”