Western oil companies’ lawsuit over Yemeni contract is dismissed [Archives:2008/1181/Local News]
By: Yemen Times Staff
SANA'A, Aug. 12 – The International Chamber of Commerce on Monday dismissed an arbitration lawsuit that two Western oil companies filed against Yemen for allegedly failing to extend a promised five-year contract.
The Yemen Exploration and Production Company, or YEPC, a joint venture between subsidiaries of the Dallas, Texas-based Hunt Oil Company and Irving, Texas-based Exxon Mobil, sued the Yemeni government in 2005.
The lawsuit alleged that Yemen failed to uphold an agreement to extend YEPC's 20-year contract for another five years as previously agreed. The dispute was over a production sharing agreement at Block 18 in Marib.
The Yemeni government put the contract extension up for a parliamentary vote, something not accounted for in the original agreement's documentation. After the parliamentary vote, the Yemeni government terminated the contract and gave it to the government-owned Safer Exploration and Production Operations Company instead.
The International Chamber of Commerce, based in Paris, France, dismissed the lawsuit, deeming that the 20-year contract that included the provision for the five-year extension already had expired and no longer was valid.
In a 2005 press release on the issue, Hunt Oil Company CEO Ray L. Hunt stated, “We're proud of our history in Yemen, having discovered the country's first oil in 1984 and having employed and trained more than 2,000 Yemeni nationals while producing more than one billion barrels of oil.” He noted that he was dismayed to have to resort to international arbiters, but felt that his firm had no choice.
Hunt Oil Company was the first to discover in the early 1980s that Yemen had petroleum and it has been working in the country ever since. The company currently invests in liquefied natural gas plants also located in Marib governorate's Block 18.
Another Hunt affiliate, Jannah Hunt Oil Company, operates oil-drilling facilities at Block 5 in Halayouh field in Jannah and currently is working on drilling in Halewah and Dhahab areas as well.
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