Armies of Liberation

When you factor in the flood and the impact of piracy inhibiting the growth and diversification of the economy, things look really bad. The end of oil is coming but the drop in prices (124 to 55) is going to have an immediate impact. The failure to rationalize government expenditures is pathetic. Saleh recently was a shopping spree with Russia and China and just upgraded the Mig’s to enable the delivery of smart bombs.

Beeb

Yemen is facing an economic and political crisis as the country’s oil resources near exhaustion, a report by a London-based think-tank says.

The Royal Institute for International Affairs warns that instability there could expand a zone of lawlessness from northern Kenya to Saudi Arabia.

It describes Yemen’s democracy as “fragile” and points to armed conflicts with Islamists and tribal insurgents.

One diplomat says that the country’s prospects get worse every month.

The World Bank predicts that Yemen’s oil and gas revenues will plummet over the next two years and fall to zero by 2017 as supplies run out.

Given that they provide around 90% of the country’s exports, this could be catastrophic.

An unnamed energy expert is quoted in the report as saying that this points to economic collapse within four of five years time.

Democracy ‘distorted’

Although Yemen was the first democratic nation on the Arabian peninsula, its democracy is described as fragile and distorted by what the report calls the northern tribal system of patronage around President Ali Abdullah Saleh.

The president is already facing Islamist insurgents as well as conflicts with tribal groups, and must stand down in 2013 after 35 years in power.

The report concludes with a grim warning that a failed state in Yemen could threaten stability across the region.

It says it could open the way to piracy, smuggling and a flourishing jihad with implications for the security of shipping routes and the transit of oil through the Suez Canal.

Its going to get a bit crunchy.

Impoverished Yemen oil revenues up in third quarter

SANAA (AFP) — Yemen, one of the world’s poorest nations, has earned 3.8 billion dollars from oil revenues in the third quarter, an increase of 86 percent over last year, a central bank report published on Saturday said.

Yemen produced 35 million barrels of crude oil between July and September, an increase of 11 percent compared to the same period in 2007, according to the report published by Yemeni newspapers.

It said that the average price of a barrel of crude oil was set at 112 dollars against an average of 66 dollars in the comparable period.

The impoverished Arabian Peninsula country of around 20 million inhabitants exports more than half the oil it produces.

Yemen is neither a member of the giant oil cartel OPEC nor of the Organisation of Arab Petroleum Exporting Countries (OAPEC).

Prices are down to about 60 in November from over 120 in July. Where they stabilize or when is an ongoing question, as is whether the oil revenue reliant Yemeni state can weather the storm.

Yemen Times

SANA’A, Nov. 5 – With a total of 1.5 trillion Yemeni Riyals the Yemeni government approved the budget for the fiscal year 2009 in an exceptional meeting yesterday. The public expenditure was estimated at YR 1.9 trillion, yielding a 7 percent of Domestic Gross Product as a net deficit of the budget.

The government had apologized earlier to the parliament for delaying the presentation of the public budget for the upcoming year, which is typically due two months before the end of 2008. Demanding a chance to review the financial plan, the government attributed the setback to the importance of reconsidering budget projects due to the global financial crisis.

Parliament members Sakhr Al-Wajih and Nabil Basha stressed the importance of determining a deadline to present the budget, as parliament members would be on a long vacation beginning from December to the end of January. Al-Wajih added that the government’s demand is logical, as the budget was drawn up on the basis of the old high prices of oil and should be reviewed again as oil prices have decreased notably during the past few weeks. In a related matter, the parliament discussed the financial committee’s report on the global financial crisis and its consequences on the Yemeni economy, summarizing the effects of the crisis and decrease of oil prices on the country’s revenues, payments and trade scales which witnessed a surplus this year due to high oil prices that exceeded USD 146 a barrel. The committee also expected that foreign support and loans will be reduced.

The committee’s report said that the Yemeni monetary reserve is safe as it was deposited in various world banks. In addition, it said that the monetary reserve deposited in the U.S. is safe from the financial crisis as it was invested through the Federal Reserve Bank, and pointed out that the amount of money in the U.S. represents only 1.7 percent of the total monetary reserve of the country.

European countries in which the Yemeni monetary reserve is invested have assured the Yemeni government that their deposits are safe in the banks. Up to 69 percent of the Yemeni reserve is in U.S. dollars, 20 percent in Euros and 9 percent in British pounds and the rest in other currencies, according to the report.

(Read on …)

What is it this time? Demanding the release of state held hostages, oil jobs or wells?

News Yemen A group of tribes in Mareb have by force closed a number of oil wells in province, local sources in Mareb said.

The sources said that armed tribes locked Thursday 10 wells in Raidan block and three wells in Monkem block. They said ten security vehicles were immediately sent to unlock the wells.

A security source told NY the incident was a destructive act, confirming that three wells have been unlocked.

NewsYemen could not contact with the security director of Mareb for more details.

The drop in oil prices will undermine the government budget and the system of payola. Yemen Post

Economy professor Abdullah Al-A’dhi told the Yemen Post that the current financial crisis across the world, especially in America, will directly affect the Yemeni economy which is directly tied to the U.S. Dollar.

Al-A’dhi continued that the disengagement from the U.S. Dollar could reduce the direct effects on the country’s economy as the value of dollar is falling before European currencies, particularly the Euro, stressing that we should diversify our basket of currency.

“Yemen will get directly affected by the fall of the U.S. dollar because the country’s exports, mostly oil, are sold in this currency. Any forced devaluation of the U.S. Dollar will devalue the exports,” said Al-A’dhi.

(Read on …)

mm

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.

FT: Soco International on Monday announced the sale of its operation in Yemen to Sinochem, China’s state-run oil trader, $465m…..

The Yemen assets sold by Soco to the Chinese group comprise a 16.8 per cent stake in the East Shabwa area. The licence is operated by Total. Net proven reserves attributable to Soco’s stake are put at 18.7m barrels with a working interest of over 6,300 b/d. In 2006 the asset generated pre-tax profit of $55m on turnover of $76m.

CC: SANAA (Reuters) - An oil pipeline was blown up in Yemen on Friday but caused no disruption to production and more than 10 tribesmen had been arrested in connection with the incident, a security official said.

The official, who declined to be named, said Islamist militants were not believed to have been involved and that the damaged section of the pipeline, about 50 km (30 miles) east of the capital Sanaa, had been repaired.

Yemen Times

SANA’A, Aug. 3 — A parliamentary report reveals corruption over the past two years at Aden Oil Refineries, a company belonging to the Yemeni government. Prepared by the Parliament-affiliated Oil and Minerals Development Committee, the report indicates that corruption at Aden Oil Refineries “consumed $200 million from public finances.” The committee prepared its report in light of its field visits to the refineries over the past four years.

Based on analysis of figures in the public budget and the Central Monitoring Apparatus, the results indicate that corruption was rampant within the administration of Aden Oil Refineries, one of the region’s oldest established energy companies. The oil refinery dismissed the report as “mere personal speculation.”

(Read on …)

Yemen Post

A report by the Oil Committee at Parliament indicated that the private sector in Yemen failed to establish and build one refinery in Dhabah in Ras Isa area, despite the different privileges it was granted together with the time period lasting for eight years.

It also announced that some commercial houses seek to privatize Aden Port Refinery and accused them of playing with the numbers and distorting facts for achieving certain ends.

(Read on …)

The YSB?

SAN’A, Yemen: A Yemeni security official says that recently detained members of al-Qaida have confessed to plans to attack oil facilities in Yemen and Saudi Arabia.

The official says authorities “obtained during interrogation” confessions from 15 militants arrested after a shootout earlier this week in the town of Tarim in Hadramawt province.

The official spoke on condition of anonymity Thursday because he was not authorized to talk to the media.

He says Saudi Interior Minister Prince Nayef bin Abdulaziz was dispatched to Yemen after learning about the confessions. Riyadh did not comment on Nayef’s visit.

The following article says the YSB group was responsible for pretty much all the recent attacks attacks, including the three mortar attacks in Sana’a, the three suicide bombings and the attacks on the Belguin tourists. And makes the point that some predict, “The international community, mainly the US, will approve of government plans to prioritise security rather than democracy.” (furthering the ultimate Talibanization of Yemen)

SANA’A // The killing this week by Yemeni security forces of a key al Qa’eda mastermind will initially sow confusion among the group, but is likely to provoke a violent backlash, an analyst said.

“This operation is a big blow to al Qa’eda and will, of course, invite an angry response from al Qa’eda to retaliate. It is clear now the confrontation between the government and al Qa’eda is open,” said Saeed Thabet, a political analyst who follows Islamist movements.

Yemeni authorities announced on Aug 12 that Hamza al Quaiti, al Qa’eda in Yemen’s number two, was killed along with five other terror suspects in a shoot-out with police the previous day in Tarim, in south-eastern Hadramaut province.

Another two suspected militants were wounded and arrested by police. Two police officers were killed in the clash.

The ministry of interior has blamed Quaiti for masterminding several terror attacks in Yemen in recent months, including four car bomb attacks and an attack on Belgian tourists in Hadramaut on Jan 18 that killed two Belgian women and two Yemeni drivers. The ministry has also accused Quaiti of being behind the US Embassy bombing in March. The attack killed a security guard and wounded 13 students at a nearby school.

(Read on …)

Im surprised they take credit when they miss so much…

Yemen Times

Two embassies, two tourist groups, two oil facilities and six security checkpoints were targeted
Al-Qaeda claims rocket attack on oil constructions in Mareb

SANA’A, July 6 — An armed group— allegedly affiliated with Al-Qaeda in the Arabian Peninsula— declared last week that it was responsible for a rocket attack that targeted an oil construction in Marib, located to the northeast of Sana’a.

According to a press release attributed to the so-called “Yemen Warriors Battalions,” armed Islamists launched three Katyusha rackets on the Safer oil refinery in Marib on June 25 with the goal of “rupturing the artery of Zionist - Crusader supply.” The press release didn’t mention the success or the failure of the attack, which came less than a month after a similar attack that targeted oil refineries in Aden.

Al-Qaeda armed operations have been increasing since the suicide bombing that targeted a Spanish tourist group in Marib last July, especially in the governorates of Marib and Hadramout.

(Read on …)

The numbers are all wrong, and the scenario espoused doesn’t fit the physical reality. There was an IED, not a pipe failure, and the amount spilled could never amount the the numbers presented in Parliament. If there’s 420,000 barrels of oil missing, its probably on a tanker, not in the ground.

al-Sahwa

Sahwa Net – A Yemeni parliamentarian, Abdul-Karim Jadban, accused on Tuesday the French company, Total, of wasting 420,000 barrels of oil worth 11 billion and 700 thousand Yemeni rials, affirming in the meantime, that the firm manipulated international standards of oil pipelines which, in part, led to leak amounts of oil in March 2008 and spoil environment.

On the other hand, Jadban further revealed that the UK firm Dove Energy had embezzled 11 billion and 423 million Yemeni rials, asking the Oil and Minerals Minister about the realities of referring the firm to a public fund court.

How do we go from 1000 barrels leaked to 420,000 barrels wasted, ’splain please.

SANA’A, NewsYemen

Member of the Parliament Abdul-Karim Jadban asked at the Parliament’s session on Tuesday the Minister of Oil and Minerals about 420,000 barrels of oil that he claimed wasted by the French TOTAL last March.

Jadban accused TOTAL of “playing with international specifications of oil pipelines that led to the explosion of a pipeline that has been linking block 10 to block 14 last March 14, 2008.”

Jadban said the explosion cost Yemen YR 11.7 billion and that the production stopped from March 27 to April 5, 2008. He added that a quantity of oil estimated at 1000 barrels leaked out and that “may destroy the environment.”

Update: “Near” the pipeline, missed again according to al-Motamar

Mareb Press

The oil pipelines in al-Buriqa zone, Aden, were hit by three missiles by unknown people.

Aden refinement is located in al-Buriqa Zone.

A security source told Mareb Press that there are no casualties. The source added tha the missiles targeted the oil pipelines.

The security authorities are still investigating the incident, the source added.

Some sources said that AlQaeda organization may be behind the attack.

(Read on …)

I dont have a catagory for pirate attacks.

Japan oil tanker attacked off Yemen

TOKYO (AP) — An unidentified ship fired on a Japanese oil tanker Monday off the eastern coast of Yemen, leaving a hole from which hundreds of gallons of fuel leaked, the ship’s operator said. No one was injured.

The 150,000-ton tanker Takayama was attacked about 270 miles off the coast of Aden in southwestern Yemen while it was heading for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement.

None of its 23 crew members — seven Japanese and 16 Filipinos — was injured, the company said. The tanker had left the South Korean port of Ulsan on April 4.

Nippon Yusen spokeswoman Yuko Tsutsui said the attack left a 1-inch hole in the tanker’s stern which was temporarily patched after hundreds of gallons of fuel leaked.

She said the tanker was heading to Aden for repairs, and its itinerary could change depending on the extent of the damage.

Yukio Yamashita, a Transport Ministry official in charge of crisis management, said the area is considered prone to pirate attacks.

He said the unknown attacker had left the scene.

Kyodo News agency said the tanker was hit by a rocket fired from a small boat.

Foreign investment is going to suffer

SANAA, April 10 (Reuters) - A blast shook an area near the headquarters of Canadian oil company Nexen in the Yemeni capital Sanaa early on Thursday but there were no casualties, a Yemeni security official said. A second explosive device was disarmed, the official told Reuters.

SANA’A, Yemen — There have been two explosions close to the Canadian Nexen Inc. oil exploration building in the Yemeni capital of Sana’a, but no injuries have been reported, a company spokeswoman said Thursday.

“We are taking all the necessary precautions to keep our employees safe,” Carla Yuill said. “We have moved a lot of our employees from the Sana’a office to some of our field operations.”

Yuill said in an interview from Calgary that the explosions happened Wednesday and last Sunday. A third explosive device has also been found and disarmed. Yuill said she doesn’t know yet whether the building was the intended target of the explosions.

There have been some historical incidents of conflict that have gone on in Sana’a but, for our company, we’ve had relatively peaceful operations there,” she said. Nexen started began oil exploration in Sana’a in 1988 and started producing oil there in 1993. The company operates the country’s largest oil project and produced 71,600 barrels per day in 2007.

Yemen Obsever

A bomb exploded early on Thursday outside the offices of a Canadian oil firm in Hadda Street, in the Yemeni capital Sana’a. The blast caused minor damage to the wall of the building of the largest oil company operating in Yemen, Canadian Nexen Petroleum. It caused no causalities according to eyewitnesses.

A police officer at the scene said that the improvised device was tossed into the corner of a cinema adjacent to the company’s building. He said a second bomb was found by the door of a nearby restaurant and defused. The incident comes just days after another attack, attributed to al-Qaeda, on a residential complex housing western workers in Sana’a last Sunday. This prompted the US Embassy in Sana’a to release a statement on Tuesday that non-essential staff will be evacuated from Sana’a immediately.

The AQY vid claimed they mortared the pipelines.

UPI

SANAA, Yemen, April 1 (UPI) — Yemen says a pipeline was damaged by a “technical fault” and not a terrorist attack as had been previously reported.

An official in Yemen’s Oil Ministry told the Platts energy information service an alleged incident on a pipeline last Thursday was not terrorist-related.

Yemen’s oil production is around 300,000 barrels per day, and not expected to increase for another two years. It’s a hotbed for Islamic fundamentalism.

The SITE Intelligence Group said a jihadist Web site it monitors took credit for bombing a pipeline in central Yemen, operated by Total of France.

“Investigations on the incident are still being conducted and nothing official has been announced yet,” the official told Platts. “It appeared according to the preliminary indications that it is a technical fault in the pipeline.”

The Jund al-Yemen Brigade has also claimed responsibility for other terrorist attacks in Yemen, including a March 18 explosion at a girl’s school.

Yemen’s oil sector has also come under fire before.

“Since the attacks on the USS Cole in 2000, several other foreign interests, specifically oil interests, have been attacked,” according to the Yemen report by the Energy Information Administration, the data arm of the U.S. Energy Department. “These include the bombing of the Limburg oil tanker off the coast of Yemen, causing a massive fire and the leakage of 150,000 barrels of oil into the Gulf of Aden; an unsuccessful firing of a surface-to-air missile at an oil company helicopter in 2002; the 2006 foiled suicide bomb attempt against two oil facilities just prior to the elections; and the more recent attacks on oil company personnel near the border between Marib and Shabwa governorates. In addition, there have been reports of violence in rural areas, attacks on oil company personnel and kidnappings.”

Yemen Post:

In his report submitted recently to parliament, Prime Minister Ali Mujawar assured that subsidies of oil and its derivatives take up two thirds of state budget while poor citizens’ benefit from its derivatives do not exceed 22 percent.

Though national economy achieved a 5.6 growth in 2005, Mujawar’s report mentioned that there was economic decline in 2006 and 2007 wherein the annual growth was just 3.2 percent.

Mujawar attributed this decline to the decrease of revenues of gas and oil estimated at 8.3 percent and 12.2 percent respectively, noting that Yemen’s produced quantity of crude oil dropped off during 2007 to reach 117 million barrels instead of 146 million in 2005.

Likewise, the growth of national investments saw a decline estimated at 3.6 percent in 2006 though it was 14.4 percent in 2005, namely because of decrease in the general investments. Similarly, foreign investments in Yemen decreased from 49.4 percent to 45 percent, dealing another blow to the country, as it tries to convince foreign investors to invest in Yemen.

Meanwhile, Mujawar pointed out that state’s reliance on oil and gas will have negative effects at the midterm, while the current and investment expenditures will increase.

He as well convinced parliament members to endorse numerous production sharing agreements without being studied adequately, hinting there is a necessity now to attract foreign capital to invest in gas and oil sectors including an agreement with Yemen General Corporation for Oil in bloc No. 39 at Al-Mahara province’s Damghot area.

Minister of Transport and Marine Affairs Khalid Ibrahim Al-Wazeer blamed the increase of oil prices, mainly plane fuels, for the losses of Yemeni Airways (Yemenia) over the years 2005 and 2006.

Al-Wazeer added that operational expenditures of Yemenia, which has 10 aircrafts of different sizes, mounted to YR 34 billion and the operational loss was YR 2.5 billion for the same year, while state subsidies for some internal destination like Al-Ghaidah and Socotra reached about YR 400 million and the loss calculated before taxation was YR 92 million.

In 2005, the operational expenditures rose to YR 43 billion and the operational loss YR 3.5. State subsidies for Al-Ghaidhah and Socotra reached YR 300 million and the losses of the same year before taxes are YR 2 billion.

Operational expenditures of 2006 mounted to YR 47 billion and the losses were YR 5 billion.

According to Al-Wazeer, the company made a small profit in 2004 and small losses in 2005 and 2006. He also mentioned that the increase of aircraft fuels and surplus employers are key reasons for loss, hinting that each aircraft has 350 employees.

He also added that there is a small profit in 2007 and these profits will appear as soon as the chartered accountant ends his revision.

Yemen’s share in Yemenia reaching 51 percent is distributed according to the company’s law as 35 percent is allocated for Tax Authority and the remaining percentage is allocated to Finance Ministry.

Oil subsidies at work.

SHABWA,NewsYemen

The director of security in Shabwa Hamoud al-Harithi said police arrested a group of people while they were attempting to smuggle a quantity of diesel abroad.

“The smugglers were trying to take away tanks containing 150,000 liter of diesel through the see,” said al-Harithi. He said owners of some fuel stations and some oil companies working in Yemen have offered assistance to smugglers.

Wow. I have to say its impressive Mujawar admitted the gross theft of Yemeni public money in the form of smuggling subsidized oil. The World Bank said it first though.

1) Why not end the smuggling first then do the reduction in subsidies?

2) Reduction in subsidies should be accompanied by a rational government budget not one where 25% of public funds goes to administrative maintenance and 25% goes to military spending. Subsidies are another 25% of the public budget.

3) Beyond misappropriation of funds, corruption control is another component of economic reform. It should be accomplished before raising prices on diesel.

Yemen Times

Following Prime Minister Mujawar’s presentation to the parliament regarding the economic achievements of his cabinet during 2007, parliament members expressed fury and anger at the poor performance of the government, given the record inflation experienced during the year. The prime minister started his presentation by highlighting the economic growth and developmental achievements during the last three years, but he also stated that economic growth has declined from 3.6 % in 2006 to 3.2 % in 2007. He also explained to the parliament that the government is suffering from immense pressures due to the decline in oil production and in turn revenue.

Removal of oil subsidies

The Prime Minister also added that the government will be forced to remove oil subsidies due to the cost of the subsidies on the government budget; he stated that in 2005 subsidies constituted 23.5 % of the budget, dropping to 21.2% in 2006. However, he added that in 2007 the subsidy will exceed 30 % due to the increases in international oil prices. He also added that the World Bank states that less than 23% of the subsidy benefits the population living under the poverty line, indicating that the other 75 % of the subsidy simply goes to smugglers of refined oil products to outside the country. The prime minister also added that the government of Yemen has failed in putting a stop to five oil and diesel smuggles who smuggle refined oil products out of the country.

“I am not saying that we will remove all oil subsidies immediately, but I wanted to inform you about the challenges the government faces including the fact that 6000 billion Riyals of oil subsidies isn’t going to the poor, but only 4 % of subsidies is” the prime minister stated, adding that the government needs the help of the parliament in making the decision to remove oil subsidies.

In response, parliament members strongly opposed the notion of removing oil subsidies stating that the increase in oil prices will be accompanies by a price hike in all other products, which will increase inflation and become an economic and social catastrophe. Head of Al-Ishah parliamentary block Dr. AbdulRahman bafadhl stated that the Yemeni public will not be able to tolerate any additional increase in retail prices. While the head of the socialist parliamentary block Dr. Aydarous Al-Naqib stated that removing the subsidies is the opposite of what the public is expecting from the government, adding that holds the government responsible for any consequences of removing the subsidies, demanding that the government holds the corrupt officials and those who misuse public resources accountable and punish them instead of punishing the Yemeni people. He concluded his remarks by saying “we, and the government, complain of corruption but we’ve never heard of holding any corrupt officials accountable”.

Even parliament members of the ruling party were disappointed at the prime minister’s justification for removing oil subsidies, saying that the smuggling of oil is done through tankers coming to Yemeni ports and sailing across the sea, not smuggled by donkeys which the government cannot trace. While other parliament members denounced the government’s inability to put a stop to organized oil smuggling, unless the smugglers are a part of the government itself.

Parliament members mistrust in government

Parliament members continued to attack the prime minister’s presentation and government economic polities, MP Abdullah Al-Badani stated that he always feels suspicious and horrified whenever the government visits the parliament to present its achievements. He stated that he cannot see the economic progress the government is referring to while the value of the Yemeni Riyal is collapsing as opposed to other currencies, stating that the government economic policies are similar to a missile attack that aims at the destruction of the country, calling on the government members to go to the street and see the thousand who eat out of the garbage.

MP Sakher Al-Wajeh inquired why does the government have a monopoly on a single entity in importing refined oil products, adding that the government’s reliance on treasury bills to control the supply of money is a sign of economic failure. He also demanded an explanation why the government has monopolized import of scrap metal to only two selected businessmen, in turn driving many others out of business. MP AbdulRazaj Al-Hajri also commented on the prime minister’s achievement in giving raises to seven thousand retired political security officers, and said that we need seven thousand bakeries to feed the people, and this achievement is no achievement at all and the government needs to reprioritize.

MP Abdulkarim Shaiban stated that the economic development mentioned in the prime minister’s presentation is simply a myth and un true numbers, adding that the government has failed in preparing a business environment that succeeds in attracting investments, as evident by the declining investments coming to Yemen. He also added that the privet sector has become tired of continued restrictions on business and additional taxes.

Several other parliament members criticized the government for providing inconclusive information relation to other issues including security issues and the unrest in the south which have a direct baring on the economy. MPs also demanded that the prime minister revises his report and includes detailed information on the price hikes, how the proposed subsidy funds are going to be used if the oil subsidy is removed. The prime minister promised to resubmit his report in mid April.

Guardian

SANAA, Feb 11 (Reuters) - Yemen has no immediate plans to remove costly fuel subsidies despite budget pressures arising from declining oil output, Oil Minister Khaled Mahfoudh Bahah said on Monday.
He told Reuters in an interview that Yemen’s crude production would drop to 300,000 barrels per day (bpd) this year from an average 320,000 bpd last year, but voiced confidence that intensified exploration would reverse the trend and raise output to 500,000 bpd in the next five years.
The impoverished country on the southern tip of the Arabian peninsula struck oil in the 1980s but production has dipped since 2004 after hitting a plateau of 436,000 bpd.

(Read on …)

al-Motamar

almotamar.net - Security forcers in Yemen captured Saturday as gang that was trying to an oil pipeline in the area of Sarwah, Marib governorate, among them a person wanted by security over abduction of foreign tourists.

Security sources mentioned today that security forces arrested thee members of the gang while another member of the four-member gang is being hunted down.

26september.net quoted the security sources as clarifying those security men managed to surround the gangsters and then captured them as they were trying to carry out a sabotage act on the oil pipeline.

The sources pointed out that one of the captured gang’s members is wanted by security over the incident of kidnapping the Italian tourists and he is called Salam Ali al-Amiri, in addition to Mohammed Saleh al-Zaidi and Jarallah al- Salihi while the fourth member of the gang Ghalab Hussein al-Zaidi is being chased by security.

Reuters
SANAA (Reuters) - Yemeni forces have foiled an attempt to blow up a crude oil pipeline in the Marib province and arrested a number of “saboteurs,” the official Yemeni news agency Saba said on Sunday.

“Interrogations are under way, but the initial results indicate that this group is linked to the terrorist bombing of the pipeline last year,” Saba said, citing the head of security in the province.

In November, tribesmen blew up a pipeline that carries crude oil from the Marib oil basin to storage tanks at the Ras Issa terminal for export. No one was harmed in the bombing, which took place in a desert area in the eastern Marib province.

Officials said at the time that the perpetrators were not linked to Islamist militants. Tribesmen sometimes kidnap holidaymakers and foreigners working in Yemen to press for better schools, roads and services or the release of prisoners.

Now they are terrorists, the Yemen Observer sez:

A terrorist attack targeted an oil pipeline in the area between Marib and Serwah in the north east of Yemen on Friday night. The attack resulted in exploding the pipeline. However a security source revealed that security forces exchanged gun fire with the terrorists and resulted in injuring one of the security personnel and wounding one of the attackers and arresting two terrorists. The three attackers were named al-Gamily, M. S. al-Zaidi and A. al-Zaidi. The security sources revealed that the perpetrators will be prosecuted and presented to justice soon.

I have to say I’d like to hear the Civil Service Minister’s side of this story. Previously the implementation of the wages strategy to different sectors was held up pending the implentation of important reforms removing ghost workers and double dippers etc. Both the education and health sectors had similiar issues; in which case the protests are directed at the wrong ministry.

SANA’A, NewsYemen

Employees of the Yemeni Oil Company started a sit-in Saturday morning demanding that the ministries of oil and civil service should quickly improve their situation.

They protested the delay of Civil Service Ministry to apply the second stage of Salary Strategy to oil sector employees and paying them the professional allowance.

Head of Oil Syndicate Mohammad Noaman told NY that “the sit-in came after many promises from the ministries of oil and minerals to give oil employees the new salary increase and professional allowance”, accusing Civil Service Ministry of obstructing the second stage of Salary Strategy and Oil Ministry of ignoring the demands of its employees and their situations. Noaman said: “the sit-ins will continue until our requests are met.”

An official source in the Ministry of Oil and Minerals said they have been ordered not make statements to media on the sit-in, but the Public Relations in the ministry told NY: “the protestors are just few employees and work at the company is not affected”. He asked NY not to make “clamor” over this issue.

Yemen Post

Such a move is also prompted by the low state subsidies allocated in 2008 budget and discussed parliament recently. Compared to 2007 budget, the government reduced the subsidies 25 percent with YR 309 billion instead of YR 418 billion in 2007.

Yemen Times

- Yemen’s external debts increases by US$ 341 million

The Central Bank of Yemen has stated that Yemen’s external debt has increased from US$ 5.47 billion in 2006 to US$ 5.811 billion in 2007, with an increase of US$ 341 million, out of which US$ 291 is new loans borrowed from the International Development Agency (IDA). The Central Bank has also stated that the bank’s foreign reserves has increased from US$ 7.545 billion by the end of 2006 to US$ 7.762 billion by the end of 2007.

- Yemen’s crude exports fall by 23 percent in 2007

According to official sources, Yemen’s income from crude oil exports has decreased from US$ 4.013 billion in 2006 to US$ 3.087 billion in 2007, due to a decrease in production of 33 percent. Oil production in 2007 has decreased to 42 million barrels compared to 64 million barrels in 2006.

Diesel subsidies

2002 were YR42 billion
2003 were YR102 billion
2005 were YR134 billion
2007 were YR424 billion
2008 projected YR 408 billion.

Its Saleh and his thief partner, Tawfiq Abdul-Rahman, the sole distributor, keeping the price down so when they steal it and resell it, they make more profit. So they are stealing twice, once the oil and once the subsidy. Some estimates say diesel smuggling accounts cost Yemen 180 billion Yemeni Riyals annually. It goes straight to Saleh’s pocket.

al-Motamar

almotamar.net - The value of Yemeni oil exports revenues for the period of January-November 2007 to $2billion and 620 million compared to $3 billion 737 million for the same period of 2006. Thus Yemen has lost $1billion and 117 million compared to the same period of 2006.

An economic report issued Sunday by the Central Bank of Yemen ascribed the causes of that drop to reduction of Yemen’s oil production quantities as the production for the compared period dropped 36.39% against a drop in value by 30%.

According to the report Yemen’s quantities of oil during the period of January-November 2007 reached at 37.38 million barrels at a price of $70.1 per barrel against 58.6 million barrels at a price of $36.6 for a barrel for the same period of 2006.

SANA’A, NewsYemen

Oil and gas have provoked protests amongst people in oil-rich Yemeni provinces of Marib and Shabwa as people there ask the government and oil companies for 10 percent of oil and gas revenues and more attention.

Hundreds of citizens in Marib gathered on Tuesday to complain environmental pollution, the need of farmers who depend upon diesel for the State support. They demanded employments in military and civil institutions and oil companies, scholarships of different specializations as well as increasing the number of beneficiaries from social security.

The protesters demanded in their statement compensations for farmers affected by oil and gas contamination.

The protesters formed a committee comprising 54 sheikhs, social figures and law specialists to follow up meeting the requests.

(Read on …)

Thats over one billion US. Extra costs from the war in Saada, oil subsidies, the extra month salaries promised during Saleh’s campaign, etc:

Al-Motamar
almotamar.net - The parliamentary financial committee on Saturday recommended approval of the government request for an additional appropriation to the state budget of this year with an amount of YR 278 billion, 330 million and 567 thousand.

The committee has justified its approval in its report submitted to the parliament Saturday by mentioning there were additional expenditures occurred during implementation of the budget that necessitated opening the appropriation to meet the events in Saada, payment dues of the retired and those reinstated, the approved increment for the Yemeni students abroad, bonus of Ramadan for the government employees, teachers work nature allowance in addition to meeting oil exploration expenses carried out by Safer Oil Company, expenses of oil products subsidy,

The committee ascribed its approval also to Yemen’s non-benefit from oil prices rise in the world pointing out that the actual resultant of oil revenues achieved a shortage estimated at YR 78 ,million because of misestimating the quantities of oil expected to be produced.

The committee added that this additional appropriation is considered an exceptional case compared to additional appropriations for the past years requested by the government.

More budget figures:

- Government expects US$ 2 billion deficit in 2008 budget

Minister of Finance Noman Al-Sohibi told the parliament that the government expects of a deficit of 8 percent of the total budget for FY 2008, of 399.34 billion Riyals. This deficit in financing can be overcome if the record-high Oil prices are maintained, as the budget estimates income from oil prices basing the price of oil at an average of US$ 55 per barrel.

- Government allocates 407 billion Riyals as Oil subsidies

The government of Yemen stated that 407 billion Riyals has been allocated as Oil subsidies in 2008, compared to 424 billion Riyals as Oil subsidies in 2007. The decrease comes inline with government policy to reduce all subsidies and liberalize the national market. This decrease also confirms rumors that the increasing local consumption of Oil will result in a price hike in the retail prices of Oil and Gas products in the local market towards the middle of 2008.

-COCA lashes out at random planning and poor financial management in Ministry of Technical Education & Vocational Training

A report released by the Central Organization for Control and Audit (COCA) disclosed that there have been many spending violations in the Ministry of Technical Education and Vocational Training during the fiscal year 2006, the ruling party’s mouthpiece reported. It added that the report strongly criticized the random planning and poor financial management in the ministry, plus the irresponsible exploitation of project provisions in the Third Five-Year Plan 2006 – 2010. The report, of which a copy was obtained by Al-Methaq.net, indicated that there are eight projects that received provisions amounting up to YR 690 million in the state’s general budge for the fiscal year 2006, but the implementation of which hasn’t yet been completed. Another four projects received an amount of YR 75 million, however, they were not approved by the budget plan.

The report praised the ministry’s achievement regarding the surplus of YR 3 billion, clarifying that nearly YR 5.5 billion has been allocated to 18 projects in the state’s budge of the year 2006. It, however, criticized those who exceeded the allocated provisions for 19 projects contained in the budget and lashed out at the ministry’s failure to implement 6 projects with a total cost of nearly YR 3.4 billion.

Yemen Observer

The deficit of the 2007 public budget increased from YR188 billion to YR466.6 billion, forming 11.6 percent of the Gross Domestic Product. This increase is due to the extension of the budget, according to parliament.

The draft law of the budget confirmed that the deficit would increase by the sum of the extension budget. The government had originally estimated the deficit of the 2007 budget would be YR188 billion.

The extension budget will be financed from treasury bills which is not inflationary, according to written response from the governor of the Central Bank of Yemen. Parliament approved the budget extension last Tuesday, extending the YR267.8 billion for the remainder of 2007, after it underwent consideration by the finance committee. In the vote to pass the extension, 157 members of parliament agreed to it, while 26 members were against, with 5 members abstaining.

Parliament recommended that government not propose any expenditures unless agreed upon by parliament, as stated in article 89 in the Constitution and article 31 in the financial law. It also recommended that government plan properly in order to avoid any future demands for budget extensions.

Parliament confirmed that the government must work on improving non-oil sources of revenue in order to keep up with rapid growth in expenses. Improving non-oil sources would lead to control of the budget and increase it without any external impact.

“Many countries in the world approve of such budget extensions,” said Ali al-Amrani, a member of the finance committee in Parliament, “The crucial thing is that the government should maintain the deficit rate at safe levels. I think the government is now able to extend the budget without negative effects on the Yemeni economy.”

Parliament’s recommendations included that the government allocate the sum of YR2 billion to the rural electricity sector and YR1 billion to the electricity operation units. It directed the government to spend any increase in public revenue on development and service projects, in particular the energy and water desalination sectors. Noman al-Suhiebi, Minister of Finance, said that the budget extension covers many kinds of expenditures, including presidential bonuses during Ramadan which were given to allemployees in the civil and military sectors by presidential decree. It also covers Work Nature to the educational cadre which cabinet approved in September 2006.

Al-Suhiebi added that the budget extension had also been used to pay offgovernment debts to electricity, water, and telecommunications bodies.In addition, commitments made by the Ministry of Higher Education and Scientific Research to cover aid and fees, books and tickets for students who are studying abroad for the period of August - December 2007were covered.

Some of the additional budget was allocated to pay the gap rate for the salaries of envoys abroad for the fourth quarter of 2007. This sum added to the budget of the Ministry of Foreign Affairs, al-Suhiebi said.

“The extension of the budget was also allocated to pay the cost of building and construction of various authorities in the Hardhramout,” said al-Suhiebi. “As well as to compensate the supreme committee for elections to a supplier according to a report by the Central Organization for Control and Auditing. Owners of houses in many regions have been compensated for land that will be taken for projects.”

Al-Suhiebipointed out that the additional budget also targeted government obligations for service projects, including the supply of materials and installation ofelectricity networks in Hadhramout, and the payment of existing obligations on service projects in Taiz Governorate. It also targeted the payment of financial obligations for infrastructure projects in Sana’a, Ibb and the establishment of funds to rebuild the affected areas in Sa’dah Governorate.

Al-Suhiebi said that the additional budget also existed to continue to support petroleum derivatives as a result of the price rise in oil derivatives across the world. It also targeted launching the work of the Supreme Anti-Corruption committee for the remainder of 2007. It aims to increase military production and to continue to implement the security plan, activating the Law of National Defense, according to al-Suhiebi.

In addition, it is directed to the salaries of new soldiers and those of retirees who come back to service.

Dr. Mohammed al-Maitami, a professor of economics at Sana’a University, said that the government was acting irresponsibly in handing out money to development projects without any kind of strategy, and reminded people that only last year the government had promised not to offer any supplementary budgets. “Mini-budgets are normally only used in exceptional cases or times of economic crisis,” said al-Maitami.

Jobs given to northerners, not foreigners, seems to be the grievence:

SAN’A, Yemen (AP) — Tribesmen attacked an oil installation in Yemen and then clashed with government troops Thursday, leaving 12 people dead, a local official said. It was the second attack on the country’s oil industry this week.

The clash in Shabwa province, about 136 miles southeast of the Yemeni capital San’a, broke out after men from the Bani Harith clan attacked a Ukrainian-run oil installation, said the province’s governor, Mohammad Ali Ruwashan.

(Read on …)

If the regime says immediately that its tribesmen, then probably its not.

The Associated Press Monday, November 5, 2007

SAN’A, Yemen: Unidentified saboteurs bombed an oil pipeline Monday in Yemen’s central Marib province, causing damage but not casualties, a security official said.

Yemen’s official news agency SABA quoted Ahmed Fandar, a Marib security official, as saying a “group of saboteurs” were behind the explosion, which halted the flow of oil.

(Read on …)

A very good idea on somebody’s part.

CCTV installed in Aden oil refinery [27 October 2007]

ADEN, (Saba) - The Romanian firm UTI Systems launched on Saturday the installation of Closed-circuit television (CCTV) at oil facilities of the Aden oil refinery after the firm got recently the
tender.

A source in the Aden refinery said to Saba that the cost of the tender was estimated to be $860,000, pointing out that the CCTV would be installed for the first time in the refinery since setting
up it in 1954.

The source noted that the daily production of the refinery reaches 100,000 barrels of petroleum. YA/AF
Saba

Shady Financial Dealings

Al-Sahwa: A parliament report revealed that the Aden Refinery was fined YR 2.343 billion it paid for foreign companies due to the delay of payment for the companies. According to the report, in contrary the refinery failed to get its debts by foreign companies estimated at YR 38.7 billion.

The report noted the refinery has not sticked to the stated regulations and legislations in relation to rationalizing expenses and due that and bad plans it has got much debts.

It bought cars for the company for YR 119.9 million and sold crude oil which should be refined locally for foreign companies, but didn’t meet all legal procedures regarding its purchases.

And the money goes where, to whom?