Parliament report discloses corruption at government’s Aden Oil Refineries [Archives:2008/1178/Front Page]

August 4 2008

SANA'A, Aug. 3 ) A parliamentary report reveals corruption over the past two years at Aden Oil Refineries, a company belonging to the Yemeni government. Prepared by the Parliament-affiliated Oil and Minerals Development Committee, the report indicates that corruption at Aden Oil Refineries “consumed $200 million from public finances.” The committee prepared its report in light of its field visits to the refineries over the past four years.

Based on analysis of figures in the public budget and the Central Monitoring Apparatus, the results indicate that corruption was rampant within the administration of Aden Oil Refineries, one of the region's oldest established energy companies. The oil refinery dismissed the report as “mere personal speculation.”

Considered the first of its kind, the report discloses corruption within one of Yemen's best-known oil institutions believed to yield high revenues for the Yemeni government. The report says the refinery's expenditures amount to 99 percent of its revenues most years, which minimizes its profit, despite the fact that it only has a 0.22 percent tax imposed upon it, in addition to global oil price hikes during 2005 and 2006.

According to the report, refinery administration purchased oil derivatives from outside Yemen without any tenders. It depended on only three companies – the Independent Petroleum Group, FAL and Vitol, which posed numerous questions, given that the refineries' oil derivatives procurement totaled $1 billion in 2005 and more than $ 1.5 billion in 2006.

The Saudi-based Economic newspaper reports that Abduljalil Thabet, head of the Oil Development Committee, said Aden Oil Refineries imported $1.5 billion in oil derivatives without tenders during the past year.

The paper also reports that evidence of these violations is available based on information from the Central Monitoring Apparatus, as well as negative reactions from refinery officials who met with the committee during the report's preparation.

Aden Oil Refineries Executive Manager Salim Al-Mashdali refutes the report's findings that the refineries sold $16 million worth of oil, according to the Central Monitoring Apparatus's 2005 and 2006 reports.

Al-Mashdali maintains that there's a misconception about the refineries, pointing out that they don't sell crude oil. Further, he accuses the parliamentary committee of “defaming,” falsifying facts and damaging the refineries, which have served Yemen's economic institutions for some 45 years.

The manager affirms that the refineries still are able to work and achieve profits for the coming years, adding that the facilities' total revenues were approximately $8.2 billion in 2006 and 2007.