Somali Prime Minister Sees CNOOC Deal as 'Invalid'

LONDON Jul 16, 2007 (Dow Jones Newswires)

A deal granting China's CNOOC Ltd. (CEO) exploration rights in Somalia is seen as "invalid" by Prime Minister Ali Mohamed Gedi, a Somalia government official said Monday.

The official said the agreement is "null and void" because the parliament has yet to vote on a petroleum law that will provide a legal framework for such agreements.

He said the law is to be voted upon in the coming weeks.

The Financial Times reported on its Web site Friday that CNOOC has gotten permission to search for oil in part of Somalia.

Somalia, which has been off-limits for U.S. oil companies since it descended into anarchy in the early 1990s, hasn't deterred CNOOC. The Chinese company met with Somali government officials in a Nairobi hotel in June to hammer out the details of its planned survey work, due to begin in September, the FT said. At a June 24 meeting in Nairobi, parts of that agreement were clarified by Somali Energy Minister Abdullahi Yusuf Mohamad and CNOOC Africa Managing Director Chen Zhuobiao, according to a record of the meeting seen by the FT.

But the government official told Dow Jones Newswires that the deal had been signed without the knowledge or approval of the Somali prime minister.

Copyright (c) 2007 Dow Jones & Company, Inc.

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