A good example [Archives:2007/1099/Viewpoint]

November 1 2007

The Editorial Board
The government of Yemen depends on Oil for around three quarters of its revenue, the money used to finance its operations, pay the salaries of half a million employees, and invests in the country's infrastructure and modernization. At least this is the theoretical part of what the government is using the income generated by Oil sales.

But we are running out of Oil, ever since the peak in production in 2002, Yemen's Oil production is decreasing while Oil reserves are running low, this fact puts a lot of pressure on the Ministry of Oil, and in turn the Oil companies operating in Yemen, to pump out more oil and expand exploration activities in an attempt to discover additional Oil reserves.

Minister of Oil Khalid Bahah says that a daily digest of Oil production is faxed every day to the Prime Minister and the President, two persons who are constantly monitoring the situation and are worried if the price of oil slumps what impact that will have on the government's ability to finance its operations.

The Ministry of Oil has made several attempts to encourage Oil companies to invest more in their exploration activities, and has also voluntary established a transparent bidding process to allow companies to compete for Oil fields, thereby ruling out any opportunities for intermediates and corruption to take place in the process. This action increased the confidence of Oil companies in Yemen and reduced the risks associated with dealing with corruption.

The Minister undertakes routine visits to the premises of Oil companies and talks to its expatriate and local staff, on every visit the minister is accompanied with a note taker who records any issues that need follow up including solving recurring problems with customs and other government agencies, and thereafter he follows up to ensure that these issues are sorted out, even if took him to raise the issue to the president personally, which he did on more than occasion.

A year ago, Bahah went to Oslo to participate a conference on the Extractive Industry Transparency Initiative (EITI). It was a relatively new mechanism about disclosure of Oil production, Oil revenues, and other relevant details which enhances transparency in the sector through making such information public. It was a long and bureaucratic process until an application for Yemen to join the initiative was sent to the EITI council, and we await completion of formalities towards joining the initiative, hopefully soon.

Bahah made many promises, he promised to discover more oil and increase production significantly, he promised to revive the Aden refinery and distribute unleaded fuel throughout the country, he also promised to Yemenis 90 percent of the workforce in the Oil sector, but most importantly, he promised Yemen to join the EITI and provide a mechanism for the public to monitor Oil production and revenues. We can see that he is trying to live up to most, however he has set a high standard for himself and increased our expectations from his ministry, and we hope that he would be able in realizing all of his promises during his service as Minister of Oil.