Joint Yemeni-Omani oil export company to be formed [Archives:2006/937/Business & Economy]

April 13 2006

By: Yemen Times Staff
The Yemeni Oil Company and Omani Oil Company for Marketing recently signed a memorandum of understanding (MOU) to study establishing a project for a joint company to develop oil product marketing, operating according to Yemeni laws.

The MOU included a feasibility study on cooperating and investing to build and manage oil product storage installations for lease, use and investment in fields of transferring, importing, marketing and industrializing oil products. It also provided for investment in building and operating fuel distribution stations, as well as supplying fuel to airplanes and ships at Yemeni airports and seaports.

The two firms agreed to form a joint team to discuss and follow up implementing MOU articles of agreement, as well as fix a renewable time period for the team supervising their accomplishment during the next three months at a maximum and work to facilitate the company's work.

In related news, Yemeni oil sources revealed the existence of positive indicators on commercial oil quantities in Shabwa governorate in southeastern Yemen. Chinese oil company CINOPEC said results of key seismographic survey operations it conducted in Ammaqin area's block 1 proved such indicators.

The new announcement coincides a month after another major oil discovery in Shabwa in Habban area rocks, considered the most important discovery after discovering oil in Marib and Maseela in the early 1980s. Preliminary results indicate a possible 2,552-barrel per day (bpd) oil production in Habban, in addition to a million cubic feet of natural gas.

Commenting on the new Shabwa discoveries, engineer Nabil Al-Qawsi, president of the oil exploration and production establishment, described the indicators as key to later work and beginning a new and long-awaited exploration stage. He noted that granite rock is available in certain areas of Yemen's sedimentary basins, with studies derived from available geological information showing granite's spread along sedimentary basins.

Al-Qawsi also pointed out that a special study indicates that the discovery will help evaluate former notions about petroleum migration in Shabwa basin, which supposedly contains large oil and gas quantities. He stressed that the new oil discovery widely opens the door for Shabwa to become a great oil area, contradicting international parties' statements that Yemen's oil is on its way to depletion.

Yemen is considered attractive to international firms, especially oil companies. Yemen is developing promotion policies to market large numbers of exploration blocks in other areas like Aden Gulf, in addition to the main areas of Hadramout and Shabwa due to the presence of oil in them.

Yemen's oil production currently is between 300-350,000 bpd. There are approximately 83 oil blocks in Yemen, nine of which are productive and 30 are exploratory, with the remainder open to investment.