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 …)

This is an accurate though dire asssessment of Yemen’s oil future and the late arrival of “self-awareness” and the current scramble to court oil majors. The whole thing is worth a read but here’s a bit:

IHS Global Insight Perspective
Significance Yemen is offering radically revised production-sharing agreement (PSA) terms and the opportunity of one-on-one bilateral negotiations with the Ministry of Oil and Minerals (MOM) in order to rekindle IOC-and especially oil-major-interest in exploration and production (E&P) investments in the country and reverse its rapidly evaporating fortunes.

Implications
Yemen’s completely failed offshore licensing round late last year served as a wake-up call, bringing the realisation that term revisions, institutional and legal reform, the cutting of red tape, and depoliticisation, are all necessary to kick-start investment.

Outlook
Even with this realisation the country’s deteriorating security situation-both on- and offshore-is likely to present a formidable obstacle to attracting new investment, while doubts about Yemen’s continued prospectivity seem well founded…

For companies looking to undertake virgin exploration, this would today most likely mean venturing out into areas where government authority is completely absent and where the possibility of this being reasserted might well come down to formal military conquest of the territory in question.

Also largely avoided is the topic of piracy emanating from neighbouring Somalia, which is making all sea journeys in the Gulf of Aden, around its far-flung Socotra Island and through the Bab al-Mandab Strait into the Red Sea perilous. The upsurge in incidents over the past year has made undertaking offshore exploration with slow-moving-and extremely expensive-hi-tech seismic vessels virtually impossible, not to mention placing static drilling rigs in the waters.

Sana’a, Yemen – A major fire broke out in an oil field operated by the French oil firm Total in south-eastern Yemen Sunday, but no casualties or production losses were reported, witnesses said. “A massive fire engulfed the chemical storage section in block 14,” one witness told Deutsche Presse-Agentur dpa. He said the fire caused explosions.

Block 14 is located in Massila of the Hadhramaut province, some 900 kilometres south-east of the capital Sana’a. It produces 60,000 barrels of crude oil per day.

It was not immediately clear what caused the fire.

The fire destroyed the structure of the storage facility, an oil engineer told

Yes well I guess after a decade you can presume they are just not going to get completed. Even free land grants wasn’t enough motivation.

Yemen Observer

The government’s investment authority announced Tuesday that it has cancelled 189 projects financed by Yemeni and Gulf investors, including projects that have not yet been implemented after ten years of planning.

The Manager of the Hadramout Investment Authority Khalid al-Sa’di explained that the 189 projects were cancelled as a result of investor negligence, following the grace period of four months given to them by the Hadramout governor. The governor’s actions came from directions issued by the President, which stipulated the cancellation of the licenses for projects after a designated expiry date. He highlighted that these measures were especially necessary for projects where no work has been done in the ten years since the issuance of the licenses.

Last year, the President ordered the cancellation of the land licenses of investors who had failed to begin their investment projects in Hadramout, despite the free land offered to them ten years ago. (Read on …)

al Motamar

Almotamar.net – The World Bank WB said Monday that it intends to assist Yemen for facing ramifications of the drop in oil prices for enhancement of efforts and orientations of the Yemeni government aimed to diversify sources of national income and lessening dependence on oil revenues.

Vice President of the WB for the Middle East and North Africa Daniela Gressani, currently on a visit to Yemen, said there is a steady progress Yemen has achieved in implementation of reforms. Gressani added that the WB has raised the ceiling of the annual support to Yemen to $ 120 million and adopted since the last year to offer all forms of assistance to Yemen in the form of gifts instead of loans in order to support the Yemeni government efforts for encountering the world rise in food prices and facing consequences of the floods disaster that hit governorates of Hadramout and Mahara.

Gressani also praised the level of improvement in the government performance in Yemen especially in regards to carrying out the foreign sources-funded projects. She has also stressed the significance of donors meeting of their commitments to Yemen pertaining to completion of allocations they had pledged at London Donors Conference in November 2006. She revealed that the WB would work for urging donors to speed up completing allocations of their pledges.

On the reasons behind postponement of the 3rd consultative meeting between the Yemeni government and donors, scheduled to be held last Sunday in Sana’a, Ms Gressani said the postponement was imposed by coincidence of its convening with the date of holding an international conference of donors for the reconstruction of Gaza Strip. She added, in a statement to Saba news agency on Monday, the Gulf Cooperation Council GCC states proposed postponing the meeting to a later date in order to secure large attendance. And that has been agreed between the Yemeni government and the donors.

SABA

Hyundai fines PEC $1 .7 million

SANA’A, Feb. 22 (Saba) – The Public Electricity Corporation PEC has paid a fine of $ 1.7 million for the Korean Hyundai Company which is currently implementing the Sana’a-Mareb electricity distribution network, a source at the corporation has confirmed. (Read on …)

No point in building a refinery if the oil is running out. Also the criticism of the government’s unplanned decision making and thrir handling of the wheat pricing is interesting. HSAG has that millary at Aden port. Yemen Post

The current global financial crisis prompted several businessmen and investment companies in Yemen to suspend or halt their investment projects.

In this regard, Hayel Sa’eed Anam Group of Companies, one of the largest commercial houses in Yemen, has halted the establishment of oil refinery project whose preliminary costs could reach $265 million.

Member of the Board of Directors of the group Shawqi Hayel Saeed Anam told media that freezing the project was made after making extensive feasibility and economic studies for the project upon which they decided to halt its implementation. (Read on …)

If the projects came to completion, they would have employed 26,000 people

Nearly 78 percent of investment projects in Aden have stalled, says a recent study

Yemen Times: A recent study conducted by the government revealed that 1132 investment projects in the Aden governorate have stalled or are no longer active, accounting for 78 percent of the total projects registered by the General Investment Authority.

The study was undertaken by a team from the branch of the investment authority in Aden and was headed by Mohammed Hilbub, professor of investment and supply in Aden University. The report also received support from the Germen Organization for Technical Cooperation (GTZ). According to the study, between 1992 and 2008, 601 projects have stalled and 531 remain registered by the authority but have failed to proceed as investors were unable to find land and supplies for the projects. (Read on …)

Over 19000 foreigners worked in Yemen in 2007
SABA

[06 March 2009]
SANA’A, March 06 (Saba) – Newly-issued statistics have showed the number of foreigners who worked in 2007 in Yemen had reached 19155, including 15734 males and 3421 females, while they were 14111 workers in 2006.

The official statistic, issued by the government-run Central Statistical Organisation, explained that Yemen absorbed by the end of 2007 at last 400 Omani workers, 220 Saudi workers, ten UAE workers, seven Kuwaitis and ten workers from both Qatar and Bahrain.

“There were more than 16000 Arabs worked in Yemen in 2007, including 4947 Iraqis, 3082 Egyptians, 1398 Jordanians, 1976 Palestinians, 1506 Sudanese workers, 1125 Somali workers, 947 Syrians, 281 Libyans, 280 Lebanese workers, 160 Moroccans and 80 workers were from both Tunisia and Algeria”, numbered the statistics.

“About 6862 foreigners worked in scientific and caring areas, while 4534 were technicians as the same fields. Meanwhile, 2027 foreigners operated as directors of public and business administrations, followed by more than 1847 workers were engineers. More than 3885 foreigners worked in the fields of sales, services, agriculture, breeding birds and handcrafts”.

The statistics mentioned that the local private sectors embraced 10417 workers and oil companies employed 3613 workers, while universities and education sectors engaged 1611 foreigners, up 1200 were in investment sector and over 2307 foreigners worked for other bodies.

TWN

Some 16,000 ships navigate through the Gulf of Aden each year, with more and more of them coming under attack. The AP reported Thursday that six ships had fended off attacks over the previous two days and that a seventh had been captured. More than 77 ships have been attacked this year in the Gulf, at least 31 one of them falling to captors. Ransoms paid out in 2008 are reported to have topped $30 million. (Read on …)

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The French petroleum company Total has signed an agreement with the Korea National Oil Corporation (KNOC) to farm into onshore exploration Block 70 (Attaq Area, Shabwa Province) in Yemen with an interest of 30.875 percent, a company statement said. This agreement has been approved by the Yemeni Ministry of Oil and Minerals.
Block 70, which covers an area of 1,367 square kilometers, is located in the south-eastern part of Central Yemen’s Marib Basin.
Already Yemen’s leading foreign investor, with this acquisition Total will increase its portfolio of exploration acreage in the country, beyond its recently acquired interests in Blocks 69 and 71, and will bring its technical expertise to the Block 70 consortium the statement said.
Present in Yemen for more than 20 years, Total is the operator of Block 10, East Shabwa and holds several other participations in oil exploration and production blocks, the statement said.

Right after AQ calls for more maritime actions…

The global shipping community has called upon the world’s naval powers to deploy more warships to patrol the commercially strategic Gulf of Aden to counter rising levels of piracy off the coast of Somalia.

The call comes in the wake of frequent incidents of piracy in the region, the latest being the hijacking of two vessels off the coast of Somalia Thursday.

In a joint statement, leading ship associations and transport unions said the situation is “spiraling completely and irretrievably out of control.”

They have made urgent calls to the United Nations in New York and its maritime body in London seeking the deployment of effective naval forces.

It is said that some shipping firms were already refusing to transit the Gulf of Aden.

The vital sea route in the Arabian Sea between Yemen and Somalia connects the Gulf and Asia to Europe and beyond via the Suez Canal. It is critical to Gulf oil shipments.

Currently, Somali pirates are holding 13 vessels captive, along with more than 200 sailors. Most of the gangs are based in northern Somalia’s Puntland region, where security forces reportedly clashed with pirates on Thursday.

Workshop on failure of investment projects in Aden to be held

[29 August 2008]

ADEN, Aug. 29 (Saba)- Economic sources said on Friday that a workshop would be held in Aden province next Saturday for reviewing and assessing unimplemented projects.

The sources affirmed that 200 projects have been faltering in the province as well as some projects have been transferred from investment projects to housing purposes.

The workshop will be organized by the General Authority for Investment (GAI) in collaboration with German Technical Cooperation (GTZ).

The sources added that the workshop would be attended by about 60 investors and representatives of the General Authority for the Lands, the Chamber of Aden Commerce and Industry and other government bodies to assess the causes of the failure of those investment projects in Aden.