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Last Updated:  Tuesday, 4 March, 2003, 08:18 GMT
Oil: Western Sahara's future
By Stefan Armbruster
BBC News Online business reporter

Saharawi camp (Photo: Danielle Smith)
The Saharawis' future is still uncertain despite the ceasefire
The discovery of oil in Africa usually provokes mixed reactions, but for the continent's last colony it could mean the difference between independence and annexation.

Western Sahara's future has been in the balance since 1976, when the colonial power Spain pulled out and Morocco invaded.

After years of sporadic fighting, the United Nations brokered a cease fire between Morocco and the Polisaro Front independence movement in 1991.

But more than a decade later, the UN has failed to hold a mandated referendum on independence.

Now the country's oil reserves have become a factor in the struggle as US, French and Australian oil companies begin to report their first findings.

Secure oil supplies

In the last year, international attention has begun to focus on West Africa's oil reserves, with the US and other major consumers looking for alternative sources to the Middle East.

"We've come across American diplomats where 12 months ago you wouldn't have seen any," the exploration director of Fusion Oil Jon Taylor told BBC News Online.

"America wants to secure a strategic oil supply, West Africa is seen as a relatively stable and it's also a straight route to refineries on the US eastern seaboard."

Fusion, an Anglo-Australian exploration group which specialises in the region, has reported to the Western Sahara's government-in-exile, the Saharawi Arab Democratic Republic (SADR), that it believes there are commercially viable oil fields off the coast.

"We have all the indications that there can be a working petroleum industry in offshore Western Sahara," Mr Taylor said.

The US Geological Survey of World Energy 2000 estimated Western Saharan offshore oil and gas resources are substantial, while Morocco's reserves were small.

Saharawi economy

For SADR, oil represents a resource with which they can rebuild their country if they are granted independence.

"I think it would be the biggest industry and very important for a country that needs reconstruction after years of destruction by Morocco during the war," SADR spokesman Kamal Fadel told BBC News Online.

Saharawi camp (Photo: Danielle Smith)
Thousands of Saharawis live in camps in Algeria
The Western Sahara has a population of about 250,000 and another 160,000 Saharawis live in refugee camps in southern Algeria, where they have been for up to 26 years.

The country's only other resources - fishing and phosphate - are already being exploited by Morocco.

But independence could still be a long way off as Morocco continues to claim it has the right to administer Western Sahara.

That claim is not formally recognised by any country and the UN classifies Western Sahara as a "non-self governing territory".

Moroccan energy needs

For Morocco, which produces less than 1,000 barrels of oil a day and spends heavily on energy imports, Western Sahara's offshore oil literally represents a light in the darkness.

James Baker meeting Polisaro officials in Algeria
James Baker proposes limited autonomy
It signed a reconnaissance deal for the Western Sahara with US oil company Kerr-McGee and France's TotalFinaElf in 2001.

"The reason why Morocco invaded Western Sahara in the first place was because it is very rich in mineral resources," Mr Fadel said.

Kerr-McGee has even claimed in a US Securities and Exchange Commission filing that its exploration license has been granted by Morocco.

In response the SADR signed its deal in May last year with Fusion, which already has extensive offshore experience in neighbouring Mauritania.

UN recognition

In February 2002, the UN undersecretary for legal affairs, Hans Correl, ruled Morocco had no right to award contracts that would allow oil to be pumped in Western Sahara.

He said the "exploitation of natural resources in a non-autonomous territory" is only allowed "if it benefits local populations, is carried out in their name or in consultation with them".

The SADR, which is recognised by 74 countries, and the African Union, formerly the Organisation of African Unity, says it has had no contact with Kerr-McGee or TotalFinaElf.

The UN's peace negotiator, former oilman and US Secretary of State James Baker, has put forward a proposal to give Morocco ultimate sovereignty, but giving Western Sahara wide-ranging autonomy.

King Mohammed of Morocco is a close ally of the US and the two countries are currently negotiating a free trade deal.

Saharawi frustration

Mr Baker's proposal has angered the Saharawis because it would mean abandoning the independence referendum.

It has already been repeatedly delayed by Morocco's insistence that its nationals who have taken residence since 1976 be included.

There could even be a return to hostilities.

"We have a ceasefire for the UN to implement a peace plan and organise a referendum, but if it doesn't take place the reason for the ceasefire is gone," Mr Fadel said.

Mr Baker's proposals will be considered by the Security Council at the end of March.

The Baker solution would also be a blow to Fusion, whose contract allows it to cherry pick three oil licences in the Western Sahara as a reward for its work - but only when the territory is admitted to the UN as a nation.

UN Sahara peace plan rejected
20 Jan 03 |  Africa
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14 Jan 03 |  Africa
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03 Dec 01 |  Africa

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