Statements

Statement by Africa Oil


June 23, 2014

In response to on-going media allegations about our operations in Ethiopia and Somalia, we believe it is important that we provide further facts about the situation on the ground to a wider audience. Our statement in regards to our Ethiopian operations is already on the front page of our website and remains relevant, addressing all of these allegations. In relation to our activity in Somalia we would like to make the following comments.

Somalia is going through an unprecedented period in its history with a real opportunity for all stakeholders to assist in the rebuilding of the country. We believe that any discovery of oil, and the associated revenues that could potentially be derived from this, could significantly aid the rebuilding of the country in the long-term if managed in a sustainable and responsible manner. Whilst the political and security situation in Somalia remains complex and challenging it is only through the active engagement of all stakeholders (governments, international organisations, the private sector, civil society and local communities) that these can be addressed and resolved.

Africa Oil Corp., through its subsidiary Horn Petroleum, has been active in Somalia since 2007. The Puntland Regional government was at that time the recognised authority with whom we negotiated the contracts. There was no permanent Federal government in Mogadishu and Somaliand had unilaterally claimed independence in 1991, but had not been recognised by the international community. The borders claimed by Somaliland were also not recognised internationally and so both of our concessions were located within the Puntland region of Somalia. Claims by other companies that are under Force Majeure are primarily a matter between them and the Puntland Regional State. However we understand that the government has approached all of these contract holders to determine their position and none of them have indicated an intention to resume activity.

Africa Oil is actively engaged in discussions with the relevant national and regional governments in Somalia, international governments and organisations, as well as other industry players on how best to take forward the exploration of these resources across the country in a way that reduces rather than exacerbates tensions on the ground. This includes discussions around how Somalia can develop the institutions and systems it needs to best manage these resources in terms of an effective Federal system, good governance and financial transparency.

Whilst there is on-going conflict across many parts of Somalia this is not related to our company's presence. We have also stated that we will not move forward our operations in the Nugaal Valley until border issues have been resolved, in order not to exacerbate the situation.


Keith Hill
President/CEO Africa Oil Corp.


Africa Oil Statement on Ethiopia

June 6, 2014

Following recent media focus on Africa Oil's presence in Ethiopia, the company would like to make the following statement to clarify the actual situation on the ground.

Africa Oil has interests in several exploration concessions in Ethiopia. It is important to note that in all of the countries in which we operate, including Ethiopia, we do so within both international and national laws and follow industry best practice. We are open about our activity and have invited both Swedish journalists and investors to see our activity on the ground and how we look to manage a range of complex political and social risks. We welcome constructive discussion over how we can further develop these approaches.

Following the latest trip in February this year Nordea released a short film giving an overview of their impressions of Africa Oil's activity on the ground (https://www.youtube.com/watch?v=0QcLyQ2PgN4). A senior Corporate Governance Analyst from Folksam who was also on the trip stated:

"The investor trip gave us a good understanding of the challenges that face Africa Oil in Kenya and Ethiopia. We are glad to see that Africa Oil works in close connection with the local communities. Africa Oil show that they are determined to make the oil a blessing and not a curse for the local communities and they are also sensitive that the impact of company's presence and the finding of oil in the countries could be substantial".

Much of the recent media interest has focused around our non-operated interests in what is known as Block 8 in the Somali Regional State of Ethiopia in which we have a 30% share. A private UK based oil company, NewAge, are the operators of this block. Some media reports have linked our presence in this block to the on-going conflict between the Ethiopian government and the Ogaden National Liberation Front (ONLF), a pro-independence movement in Eastern Ethiopia.

This conflict has been going on for decades and passed through various periods of intense fighting followed by peace talks. There is no doubting that this conflict, as with many others occurring in Africa, is a tragedy for those directly involved. But again as with other African internal conflicts, the reality on the ground is often far more complicated than some media reports would like to admit. One of the best independent reports on both the history and recent developments in the conflict is the one the reputable International Crisis Group wrote that in August 2013 (http://www.crisisgroup.org/~/media/Files/africa/horn-of-africa/ethiopia-eritrea/207-ethiopia-prospects-for-peace-in-ogaden.pdf).

What is most salient from our company's perspective is that the conflict takes place hundreds of kilometers from our activities in Block 8, which is an area that is geographically and tribally distinct from the often referred to 'Ogaden'. Appendix A of the report shows the extent of the conflict area in the Somali Regional State. When compared with our own area of operation (http://www.africaoilcorp.com/s/project-maps.asp) it can be seen that the two do not over-lap. In fact the nearest violent incident reported by any group (government, ONLF, NGO) was over 250km from our location. In the seven years that we have been active in this area there have been no violent incidents associated with our presence, nor is there any evidence that Ethiopian security forces have committed abuses on or forcibly resettled any civilians in our areas of operation. On the contrary, our community related projects and employment opportunities in the area are welcomed and appreciated by the local population.

Accusations have also been laid against us that by operating in Ethiopia as a whole, and therefore being provided with armed security by the Ethiopian government, we are somehow complicit in the conflict.

In virtually all African countries, extractive companies who are there conducting legal business, are required to use security provided by the national governments should it be needed. This happens in our operations in Ethiopia as it does in Kenya, and does for other companies in places like Libya, Nigeria and Tanzania. It is unreasonable to suggest that all of these companies are therefore somehow accountable for every action undertaken by state security forces outside of their sphere of influence. Many Western governments, NGO's and the United Nations also rely on security provided by these governments to be able to conduct their business safely and securely.

In Ethiopia we use no private, armed security forces. In places where armed security is needed there is a requirement that this is provided by the Ethiopian government. Given the isolated nature of the drill site in Block 8, and its proximity to the insecure Ethiopian/Somalia border and therefore the potential threat from militant activity/terrorism from within Somalia by organizations like Al Shabaab, our partner NewAge Africa has Ethiopian soldiers stationed there. In our other operational blocks in Ethiopia such as the Rift Valley Area or South Omo Block, we need and therefore use minimal armed security, which tends to be Ethiopian police rather than soldiers.

In addition we believe strongly that the responsible, sustainable and transparent
development of natural resources can lead to positive economic and social
development for countries and their citizens. In all of the countries in
which we operate, including Ethiopia, we offer much needed employment, access to contracts for goods & services and community development
projects such as clean water, safe & reliable energy and health and
educational facilities.


Keith C Hill
President & CEO Africa Oil Corp.


Statement Regarding Africa Oil's Activity in Somalia

July 17, 2013

Somalia is going through an unprecedented period in its history with a real opportunity for all stakeholders to assist in the rebuilding of the country. We believe that any discovery of oil, and the associated revenues that could potentially be derived from this, could significantly aid the rebuilding of the country in the long-term. However as always there are challenges. We recognise the border dispute between Puntland and Somaliland and, for this reason, have not conducted any operations in this area to date, and will not do so until a peaceful resolution is reached.

Africa Oil is also actively engaged in discussions with a range of governments and organisations, domestic and international, as well as other industry players on how best to take forward the exploration of these resources across the country in a way that reduces rather than exacerbates tensions on the ground. This includes discussions around how Somalia can develop the institutions and systems it needs to best manage these resources in terms of good governance and financial transparency.

Alex Budden
Vice President - External Relations


Statement Regarding Africa Oil's Activity in Ethiopia

February 19, 2013

Africa Oil Corp. operates within international and domestic laws in all areas of our activity. Our company has a good track record of implementing a wide range of Corporate Social Responsibility policies and we are proud to play an active and positive role in the countries where we operate. We work closely with the local communities in these areas including regular engagement and consultation.

We recognize that we often operate in challenging environments but believe strongly that the responsible, sustainable and transparent development of natural resources can lead to positive economic and social improvements for host countries and their citizens.

Keith Hill
President/CEO