KMG not worried in Western Sahara

KERR-McGee remains unfazed by the growing row in Norway concerning the legitimacy of exploration activity off Western Sahara, the former Spanish colony under occupation by Moroccan forces.

Upstream Online, 14.01.2005

Rabat claims sovereignty over the territory, while the indigenous Sahrawi have declared a republic recognised by the majority of African nations.

KMG claims that a UN Legal Office statement by department chief Hans Corell a couple of years ago clearly sanctioned the limited activities involving seismic surveys and data analysis.

However, activists and the militia fighting for the independence of the Sahrawi Arab Democratic Republic claim Rabat had no sovereign right to award even a reconnaissance licence.

Western Sahara support groups are planning to step up their campaign against KMG in the coming weeks on the back of claims that KMG's "drop coring" activities violated Corel's ruling. They claim that, as the activities involved taking physical soil tests, they therefore constituted "further exploration" of a kind the UN was keen to discourage.

The US explorer has now admitted that it negotiated an extension to its licence, which is now due to! expire on 1 May 2005.

The original deal with the Moroccan National Office of Research & Exploration (Onarep) specifying mapping oil resources in "southern Morocco" was signed in September 2001. The licence was renewed in 2003 and again late last year.

"We support ongoing efforts by the UN to find an amicable solution (to this dispute) and our reconnaissance permit does not prejudge or prejudice the efforts of the UN and others to resolve it. We also hope to make a contribution to the development of the people (there)," said a KMG spokesman.

Total recently left the scene, apparently because it held out little hope for oil, although activists claim that the French supermajor's departure was in response to their international campaign.

Total was preceded by TGS-Nopec and the Fugro Group, both of which left after apologising for their role, and declaring that they would be more circumspect in future over work off Western Sahara.

The latest company to offer a public apology is Faroese offshore services outfit Thor, which this week admitted to working for two months on subcontract to TGS-Nopec off Western Sahara in 2002. "We were there for two months in 2002... but we knew nothing about the political problems in the area," chief executive Hans Joensen is quoted as saying in a Faorese newspaper.

Thor will not send any more vessels to work off Western Sahara "even if it gets the possibility. We never checked with any political authorities and were unaware of any political tensions", Joensen said.

In Norway, the controversy over Western Sahara led investment fund Skagen Vest to sell its #3.6 million ($4.7 million) holding in KMG at a loss. However latest figures from the Bank of Norway indicated that the country's Petroleum Fund holds close to #5.6 million worth of shares in KMG.

Norwegian Finance Minister Per-Kristian Foss has revealed that the fund's ethical council is considering disinvestment from KMG following an increased risk of "international condemnation".