Economy News [Archives:2001/30/Business & Economy]
6 New Oil Sectors
New agreements granting oil concessions in the sector No. 60 are to be signed in the coming few weeks with Canada, Austria and Spain. Oil sectors have reached to more than 69 after annexing 6 new promising sea sectors over 89 thousand km2 to the south of Mukala Oil Minister said that Yemen’s production of oil would rise from 460 thousand barrels per day to more than 470 thousand barrels by the end of this year. That will be achieved as the British Dov Company will launch oil production in sector No. 53 in November in Hadhramout with a production capacity reaching 15 thousand barrels per day.
Yemeni-Syrian Joint Committee Enhances Trade and Economic Cooperation:
Headed by the two PMs of the two countries, the Yemeni-Syrian Joint Committee will hold its periodical meetings in the capital from July 20. Meetings will focus on what has been carried out of agreements, signing new agreements as well as to promote trade, economic and technical expertise exchange.
International Seminar to be Held in Sana’a:
Organized by the Ministry of Planning and Development, an international seminar on the strategy of alleviating poverty is to be held during 23-25 July. The project is drawn in collaboration with the WB, IMF and UNDP. Organizations and donor countries will take part in this seminar.
The seminar has the objective of reaching a time plan with the donor countries to alleviate poverty. Strategy prepared by the Development Ministry indicates that the slow economic development not exceeding 5% has failed to improve the poverty situation. The individual share of the LDC has decreased to $ 300 at a time the rate of families living below the poverty line has increased from 9% -17% to 33% between 1992-1998.
1000 Poor Families Supported by Kuwaiti Corporation:
The Kuwaiti International Development Corporation has presented loans to fund small enterprises of about 1000 Yemeni poor families in the capital Sana’a. Some of these enterprises were for women such as sewing centers and clothes shops. Others for men such as opening trade and agricultural projects. The corporation adopts more than 400 thousand projects to support the poor in Yemen, Egypt, Lebanon, Malaysia and Indonesia.
Yemeni Reservations on Canadian Report on Aden Refinery Privatization:
The Yemeni Technical Office for Privatization at the Ministry of Planning & Development expressed reservations about a report prepared by the Hutsen Company and a Canadian Company to privatize Aden Refinery and Fuel Supply Company. Sources in the technical office indicated that the report was not up to the expectations and was not at all acceptable as it estimated the cost of the Refinery and establishments affiliated to it at about $ 88 millions.
The report disregarded some health and social institutions affiliated to the refinery, as it overlooked the cost of the land on which the refinery and other establishments were built. Furthermore, cost of the Fuel Supply Company and other assets did not exceed $ 2,5 million, including the oil pipeline extending from the company headquarters to the port costing $45 million.
The Investment Project of Yemeni Gas!! Where to….?
The availability of markets in Yemen to start exporting the Yemeni natural liquefied gas is still the main problem toward this strategic project which can finance the government budget to reach $750 million annually. Statistics have indicated that there were marketing opportunities which exceed 5.3 million metrical tons of Yemeni gas annually. But the main question posed itself, what is the active role of shareholder companies in investing the Yemeni liquefied gas? What have the exerted efforts achieved to accomplish the essential infrastructure for production and exportation until now. The main thing is that there are large external markets which are in dire need of buying the gas. It is noticeable that the major companies which capitalize the project don’t work seriously to aid Yemen in dealing with such markets.
16 Trillion of Gas Reserves
Gas has been discovered in Yemen particularly in Marib and Aljouf oil fields since 1984. With the expansions of oil discoveries, the natural gas reserve has reached 16 trillion cubic foot. The government’s efforts resulted in the fulfilling of a number of projects to counter locally continuous increase of gas consumption according to data illustrated in this table:
Years/LPG/ gas in tons
Gas Investors and Exporting Hindrances.
In 1996 the Yemeni Government established the Yemeni liquefied gas company to export gas through constructing and operating new installations in the gas liquefied factory, establishing production and storing pipelines and wharves. But the cost is exorbitant and has reached $5 billion. This makes Yemen to push forward to broaden its horizons in relevance with foreign companies for partnership to invest the Yemeni gas in foreign markets. International markets compete to invest the Yemeni gas. The French company TOTAL has the highest percentage (36%) in the project, then the Yemeni Gas Company (21%) ranked first. Two American and two Korean companies compete in this partnership and their invested share of profits were allocated as it is illustrated in the following table.
Total French Company36%
Yemen Gas Company21%
American Hunt Company15.1%
American Exxon Company14.5%
Korean Uoukong company8.4%
Korean Hyundai Company 5%
The shareholders anticipated that their exportation of the investment of Yemeni gas is going to reach annually 5.3 million tons and will extend for 25 years through the allocated exporting port on Belgaf on the Arab Sea. The partnership agreement said that a sub-pipeline is going to be established to cover the needs of the Capital of Yemen, Sana’a and its suburbs of the natural gas. But a number of the main factors has resulted in the impeding of gas exportation to external markets.
The reasons of impeding exporting
Reliable oil sources indicate that one main reasons of the impeding the Yemeni Gas is the intense competition with investing companies for the projects in the foreign markets. In the Australian Capital, negotiations with the Yemeni gas company have been crowned by success when the British gas company has signed a memorandum of understanding to market the Yemeni gas to India, Turkey, Lebanon and Djibouti. The French Total Company has prepared a designing, technical and necessary tenders to initiate the Yemeni gas project. Now some of the experts are looking for foreign markets at a time when Yemen has decided to postpone the production period of the liquefied gas in Belgaf from 1988 to 2003 due to the crisis which hit the Asian markets. At the same time economists raised a severe criticism due to the carelessness and leniency by which the Ministry of Oil showed towards the Total Company. It didn’t adhere to the agreement signed by Yemen and the Company in 1996 to invest the gas project after eliminating the American Company, Aaron. It is said that new hopes were renewed to reach an impending agreement with Indian Company which intends to buy 3 millions tons of the Yemeni natural gas.