Armies of Liberation

Huge losses to the Yemeni treasury, I wonder who got the graft? In 2006 the South Korean delegation came home crowing about the excellent deal with Yemen. After recently threatening to renegotiate the contracts, Yemen now says it will stand by them. This is a very interesting article, one of the contracts has a floor and ceiling price.

Businessweek

une 18 (Bloomberg) — Yemen LNG Co. will honor its liquefied natural gas contracts with buyers including Total SA, GDF Suez SA and Korea Gas Corp., an official said, after the Middle Eastern state proposed to review them. (Read on …)

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 …)

Yemen Times

Dr. Mohamed Jubran, professor of economics, to the Yemen Times:
Money laundering is responsible for the devaluation of the Yemeni riyal

He is often quoted by local newspapers and television channels on economic issues, and is well-known among economic reporters and business editors. He used to be a member of the Islah party, but now only focuses on the economy.

In his sitting room at the week-end, he finishes writing up a research paper on his laptop and scans a study about the economy of Yemen. This is Dr. Mohamed Jubran, professor of economics at Sana’a University and he is the person who always finds the courage to speak his mind on any activity related to the economy, business or banking. (Read on …)

The gas, like the oil, is in the south. With the EITI agreement about to fall flat on its face from a lack of transparency about oil sales, prices and volume, one would expect the proceeds from the LNG sales to be stolen at a similar rate. Click here for my 2006 write up of some of the issues associated with the LNG project.

Yemen Times On Oct. 15, Yemen Liquefied Natural Gas (LNG) announced the Company started producing from its liquefaction terminal in Balhaf, on the Gulf of Aden.

The Yemen LNG project is the largest and most important investment ever made in Yemen with an investment of around USD 4.5 billion. It consists of supplying gas from Block 18, located in the Marib region in central Yemen, through a 320 kilometre pipeline to the LNG plant located at the port of Balhaf on the Arab Sea, south east of Yemen.

The plant started production with the first train while the construction of the second train is being completed. The total production capacity will reach 6.7 million tons of LNG per year.
Launched in August 2005, the project shareholders are TOTAL (project leader) (39.62 percent), Yemen Gas Company (16.73 percent), Hunt Oil Company (17.22 percent), SK Energy Co., Ltd. (9.55 percent), KOGAS (6 percent), the General Authority for Social Security and Pensions of Yemen (5 percent) and Hyundai Corporation (5.88 percent).

UPI: Police in the Khawlan district, east of the capital Sanaa, said they thwarted an attack on a regional oil pipeline. Two suspects were detained on allegations of digging tunnels under the pipeline with the intent of detonating an explosive device by remote control, the Yemen Observer reports.

An attack July 2 that damaged about 525 feet of pipeline in Shabwa bore similar hallmarks as those alleged by the two suspects investigated by Khawlan police. (Read on …)

The criminalization of the state leads to incompetence and lack of oversight in all areas. I think the Yemeni “government” gave up trying to provide basic services a while ago and now its just wack-a-mole (reactive decision making).

Dead shrimp are one thing, but theres whole villages that have been sickened by enviornmental contaminaton of the extractive industries and other pollution. And the Health Ministry is so inept that its criminal. From SABA:

GAMSR warns of crude oil leaking in Shabwa

ADEN ,July 01 (Saba) – The General Authority for Marine Science Research (GAMSR) has warned of crude oil leaking due to negligence of the companies working in Balhaf, near Bir-Ali area ,in the eastern governorate of Shabwa which causes death of shrimp and various fish.

Deputy Chairman of GAMSR Saleh Awadh told Saba that this phenomenon discovered late of last June has caused death of many shrimp in Bir-Ali which is known of shrimp existence in trade quantities.

A technical research team led by Awadh headed to the mentioned area, he made it clear to study the situation.

Accordingly, the team reported to the authorities in Shabwa governorate and the government to take necessary measures and to put an end for this phenomenon which appears as oil spots at the sea, Awadh added.

He indicated that the search team did not reach a scientific result yet after examining a shrimp as they were found rotten, warning of environmental pollution in the area.

Land dispute, maybe disgruntled businessmen, leads to soldier’s death at the ZincOx mine.
Yemen Post

A soldier from the Republican Guards forces, led by President Saleh’s son, was killed and an officer was injured in fresh clashes with Al Al-Dhahak tribe from Al-Jawf’s Nihm district. (Read on …)

LM

New Delhi: India’s largest power generation company, NTPC Ltd, says its plans to set up power projects and a training centre for local engineers in Yemen—from where it wants to source gas for its fuel-starved plants back home—have run into trouble following a dispute over the cost of maintaining existing facilities in that country. (Read on …)