New US Oil Companies in Yemen [Archives:2001/46/Business & Economy]
Oil sources said that Yemen will raise its production capacity of crude oil from 460,000 barrels per day to 475,000 barrels per day as from the beginning of the upcoming year. Similarly, Yemen stroke deals with other U.S.-based oil companies by awarding them concessions to invest in oil and minerals. Ministry of Oil also signed memorandum of understanding with a US consortium led by Pan-America and U.S. Oil Production by which the consortium will get the right to explore oil and gas in blocks No. 16 and 62 located in the Arabian Sea near Mahra coast. The memorandum also stipulates that the US consortium will invest USD 35 million during the two exploration phases. Rashid Baraba’a, Minister of Oil, said, “The signing of the memorandum came as part of the activities of the Yemeni government to make public the oil sector and bring in international oil companies to start business in Yemen.” This consortium is the second of its kind to get a concession for exploring oil at off-shore blocks in the Republic of Yemen. Earlier a consortium of Australian and Korean companies got a concession to explore oil at off-shore block No. 60 opposite to Hadramaut governorate. During the last months, a memorandum of understanding was signed between the Ministry of Oil and Russ Oil & Gas Stroy at blocks 37 and 39 in Mahra governorate.
Furthermore, oil sources highlighted that some international companies showed high interest to operate at on-shore and off-shore oil blocks. Currently, 23 oil companies operate in oil and gas exploration at 33 blocks. The Yemeni government is trying to benefit from the Gulf countries’ expertise in oil exploration and extraction. Yemen encompasses oil reserves totaling 5.7 billion barrels and 15 trillion cubic feet of natural gas. In addition, the Yemeni government intends to distribute the shares of oil investment among the multinational companies with the goal of encouraging these companies to compete with each other in the oil sector. Yet, Yemen is still a small producer of oil and not a member of OPEC.