Oil Production Agreement in block 75 signed [Archives:2007/1038/Local News]

April 2 2007

Sana'a March 31 ) The Ministry of Oil has signed a production partnership agreement with U.S.-based Occidental Petroleum for block 75 in Shabwa governorate. This agreement entails that Occidental pays the Yemeni partner one million US dollars as a royalty for the license to operate in block 75.

While exploration operations are expected to start at the soonest possible, Oil production from this block is expected in mid-2008. Exploration activities are expected to cost up to US$ 12.5 million, while the Yemeni government share ranges from 64 – 80 percent, depending on the stage of production.

His Excellency Minister of Oil & Mineral Resources Khalid Bahah has stated that this agreement comes as a part of a government policy to increase oil exploration and production activities, adding that he is optimistic that block75 will be among the most promising blocks in Yemen. He also added that there are another eight such agreements to be signed during the months of April and May, which will conclude the second and third international bidding rounds.

The Agreement was signed by His Excellency Khalid Bahah – Minister of Oil and Mineral Resources representing the Yemeni side, and Mr. Donald Lipinski, VP of Occidental representing the operating partners.