In 2006, I wrote an article called Yemen’s Natural Gas, Who Benefits? The answer was TOTAL, South Korea and whoever got the payola. It should be noted that TOTAL is in charge of the LNG project from development to sales, and TOTAL sold one third of the Liquefied Natural Gas to its subsidiary, TOTAL Gas.
My suggestion to counteract “the resource curse” was to adopt the Alaskan model for the oil and gas revenues and pay a dividend to every citizen, thwarting grand corruption, stimulating the economy and small business across a broad spectrum. But that was before the oil bottomed out entirely.
Yemen Post: President Ali Abdullah Saleh ordered on Tuesday the Ministry of Oil and Minerals to reconsider contracts for selling liquefied natural gas LNG so that the prices cope with changes of global gas prices.
He also asked the government to conduct a comprehensive study on the policy of oil subsidies estimated at YR 510 billion annually.
The orders came when Saleh chaired the meeting of the Cabinet that focused on issues related to development and holding a national dialogue to address crucial national issues.
Moreover, Saleh urged to boost investment in oil, gas and minerals, fish and agriculture, rationalize the public spending and pay more attention to financial resources development.
After the meeting, Foreign Minister Abu Bakr Al-Qirbi and Minister for Oil and Minerals Amir Salim Al-Aidrous met wit the South Korean ambassador to Yemen Won Ho Kwak and informed him of the decision.
Over two thirds of Yemen LNG goes to Europe, the United States and South Korea.
Yemen’s Natural Gas: Who Benefits? Jane Novak, Worldpress.org contributing editor, August 4, 2006
One way Yemen’s “resource curse” syndrome can be avoided, economists suggest, is to distribute the profits from the sales of natural resources directly to every citizen.
Freedom House recently noted Yemen as among the world’s most corrupt developing nations. With the personal interests of the ruling elite taking priority over national development, nearly half of Yemeni children are malnourished and out of school. Unemployment is high and medical services scarce. A looming water crisis threatens to destabilize the country. Claims of development are little more than government propaganda with the gap between the extremely rich and the extremely poor widening and infant mortality remaining high year after year.
Atop the existing national crisis, experts predict Yemen’s oil reserves, which provide nearly 70 percent of governmental revenue, will substantially deplete within a decade. A natural gas project is under development. Yemen LNG (YLNG), the company responsible for producing and marketing Yemen’s natural gas, will produce 6.7 million tons of natural gas annually for 20 years. Although the gas liquefaction plant and pipeline is 23 percent complete, concerns exist about sales prices, domestic allocation, and the project’s local impact.
Sales Prices
France’s energy giant, Total SA is the major shareholder in YLNG with 39.6 percent and is in the lead on the project. Total SA has touted YLNG as “a giant gas project” and noted that it is a main component of Total SA’s future growth. (Read on …)