Yemen Hunt and the Republic of Yemen: A Successful 20 Year Partnership Worth Celebrating [Archives:2004/783/Reportage]

Hassan Haifi
There is ample reason for the Yemen Hunt Oil Company to celebrate its 20th successful year of operations in the Republic of Yemen. For one thing, the celebration will reaffirm that the strong partnership that existed between the Yemen Hunt Oil Company and the Yemeni Government, ever since the President of the Republic Ali Abdullah Saleh, set out on what was once a persistent determination to put Yemen in the international oil market some 25 years ago. It was then that Hunt Oil Co. of Texas sought to make its first major entry into the international oil market, by what was considered then a long shot: exploring and producing oil in Yemen. With the dispatch of a team to Sana'a on January 1, 1981, Mr. Ray L. Hunt initiated the trek to prove that Yemen indeed had potential as a successful oil exporting country and that Hunt was indeed a capable enterprising international oil company of credible distinction.
\r\nWith unrelenting support and encouragement from President Ali Abdullah Saleh, it wasn't long before proven reserves of commercial quantity were found in Mareb Block 18 and by 1988, production was commenced.. From then on, Yemen found its niche in the international oil market and Yemen and Hunt Oil Company began a long amicable partnership, which proved to be one of the most significant development in the economic history of Yemen.
\r\nThus the 20th year anniversary celebration of this important occasion, on Wednesday October 13, 2004 was bound to reflect the significance that both the Yemeni Government and the Yemen Hunt Oil Company accord this historical event in the history of both Yemen and the Hunt Oil Company.
\r\nHE Dr. Rashid Barabba'a, the Minister of Oil and Minerals led the dignitaries who attended this joyous celebration, who also included Mr. Ray Hunt, the CEO of Hunt Oil, Dallas as well as Mr.. Wyndell Cavines, Vice President and General Manager of Yemen Hunt Oil Co and Mr. Khalid Ali Al-Khader, Deputy General Manager. The United States Ambassador to Sana'a HE Thomas Krajeski also was present at this commemorative moment, as well as other officials from the Ministry of Oil and Minerals and guests.
\r\nThe celebration was highlighted by several speeches starting with the speech of Dr. Barabba'a, the Minister of Oil and Minerals, who opened his statement with greetings to the Yemeni people and the attendees on the occasion of the 42nd Anniversary of the Yemeni Revolution and the 41st Anniversary of the launching of the armed struggle for the liberation of the southern part of the country. He wished the nation continued progress and prosperity under its prudent leadership. He also said: “The first oil discovery brought on a new era, that catapulted Yemen to the world club of oil exporting countries. Thus Yemen was able to possess one of the major elements that are key to modernization and development” He went on to say: “The discovery of oil put Yemen on a new phase of development, initiated under the leadership of President Ali Abdullah Saleh, who gave the oil sector his special and personal attention.
\r\nHE further stated that: “Thanks to the encouraging government approach towards investment in the oil and gas sectors, Yemen became a contender in the competitive oil and gas industry of the world.”
\r\nDr. Barabba'a also pointed out: “With the initiation of production in 1988 in Block 18 in Mareb and Al-Jouf Governorates, other international firms were encouraged to explore for oil in other regions of the country. With the dream of Yemeni unification realized in 1990, oil production efforts in Block 4, west of Ayad was pursued. This was followed by the discovery of oil in Al-Museilah Valley in Block 14 in 1993, then in Junnah Field in Block 5 in 1996, Block 10 in the east of Shabwa Governorate, Block 32 in Hawarim and Block 53 East of Saar in 2001. Trial production also commenced in 2003 in other fields.
\r\nDr. Barabba'a indicated that thanks to these discoveries, Yemen's requirements for oil derivative products is now fulfilled and this has allowed Yemen to export its surplus from the its share of produced crude. Yemen's revenue from exports of oil reached over US $ 2.5 billion in 2003.
\r\nThe Minister of Oil pointed out that the discovery of considerable quantities of gas in Mareb-Al-Jouf block led to the ability to supply local demand for gas and will undoubtedly help in preserving the forestry of the country and to minimize environmental pollution. Then there is the promising potential of the exploitation of gas for electric power generation, with an electric gas power station already set for construction in Mareb Governorate.
\r\nWhen speaking of the mutual partnership of the Yemeni Government, Hunt Oil and its partners, Dr. Barabba'a affirmed the good cooperation towards serving the mutual interests of all parties, Yemeni and foreign.
\r\nThe historical record of production in Mareb Block 18, was cited by the Minister, where he pointed out that production, which began at 7,254 barrels a day culminating to a daily fixed production from 162 thousand to 197 thousand barrels a day during the period 1989 to 1996.
\r\nFurther cooperation between Yemen and Hunt Oil led to the establishment of an oil refinery in Mareb, which is playing a leading role in supplying the local markets with oil derivative products, especially gasoline.
\r\nThe Minister then expressed the appreciation of the Yemeni Government for the cooperation of Hunt Oil Company and its partners and all the efforts by its staff and workers: “We would like to mention the role of Yemen Hunt Oil Company in creating employment and provide important training for its Yemeni employees. The share of the Yemenis in the workforce of the company has now reached 80% and we are looking forward to see the Yemeni personnel take on more senior technical and management positions within the company.”
\r\nThe role of oil in development was also pointed out by Dr. Barabba'a “Under the care and directions of President Ali Abdullah Saleh, the Ministry of Oil and Minerals is taking extensive measures to benefit from Yemen's oil and mineral wealth
\r\nCertificates were given to the ministry staff in acknowledgement of their support for the company's activities in past years. After that, Dr. Barabba'a and Mr. Hunt cut the cake and the guests were invited to a lunch party held for the occasion.
\r\nRay Hunt, the chief executive director of Hunt Oil, delivered a message on the occasion of the company's celebration of 20 years' operations in Mareb Block 18, saying: “I would like to begin my remarks by first congratulating President Saleh, the government, and the people of Yemen on the occasion of the celebrations of the anniversaries of the extremely important dates in the history of the Yemeni Revolution, September 26, October 14 and November 30. The course of history was changed by these three days.”
\r\n”I would also like to express my personal appreciation to President Saleh for the outstanding leadership he has provided over the years to the people of Yemen and, specifically, to Hunt Oil's activities in Yemen. Without President Saleh's personal involvement, especially in the early days of Hunt's presence in Yemen, we would not be gathered here in Sana'a to celebrate 20 years of remarkable accomplishment for the benefit of the people of Yemen.”
\r\n”I am, obviously, very pleased to be here today in celebration of this extremely important milestone in the fabled history of Yemen. Twenty years ago, the Alif field was declared commercial and, following the completion of the construction of the pipeline and export system, Yemen for the first time began exporting oil to the energy markets of the world.”
\r\n”While we are gathering here today to celebrate the 20th anniversary of the declaration of commerciality of the Alif field, the real story is not in fact the Hunt Oil Company, working closely with President Saleh and the Government of Yemen, who discovered the Alif field – rather the real story – and the reason the we are all acknowledging the importance of this anniversary – is the fact that the discovery of the Alif field – and the subsequent production of over a billion barrels of oil from the Mareb basin – represents the very best of what can happen when government – in this case in the form of President Saleh and the Government of Yemen – and the private sector – in this case the form of a Hunt Oil Company – work together. We were able to achieve much more than either party could have achieved acting alone.”
\r\n”Looking at the past 20 years, there are many things that we can justifiably be proud of and celebrate:\r\n- Before Hunt Oil Company came to Yemen, no one in the oil industry thought that there was oil in this region – and this included your neighbors to the north.\r\n- President Saleh, the Government of Yemen and Hunt Oil Company, working together, proved the industry, your neighbors and everyone else, wrong\r\n- Not only did Hunt Oil Company discover oil on a world-class scale – the real story was that we discovered a basin in Yemen that no one thought existed.\r\n- Working with President Saleh and the Government of Yemen, Hunt Oil Company subsequently built the Mareb refinery to provide refined petroleum products for domestic use by the people of Yemen. In December of 1999, Hunt Oil Company turned over ownership and day-to-day operations of the Mareb refinery to the Yemen Oil Refinery Company which created more jobs and opportunities for Yemeni workers.\r\n- Working with President Saleh and the Government of Yemen, Hunt Oil Company, in the 1986-1987 time period, built the 437 km pipeline from the Mareb basin, over the mountains, and down to the Red Sea, which was one of the largest and most difficult oil industry construction projects anywhere in the world.\r\n- Working with President Saleh and the Government of Yemen, Hunt Oil Company converted the Safer – which is one of the eight largest oil tankers ever built – into a floating terminal to receive the oil production from the Mareb basin fields which Hunt had discovered.\r\n- Construction of the pipeline was completed in 1987, and when President Saleh and I turned the valve to officially open the pipeline, Yemen assumed its rightful place amongst the oil production countries of the world, the economic and political ramifications of which have been very beneficial to Yemen.\r\n- Since then, over 1 billion barrels of oil have flowed through that pipeline providing energy to world markets and significant revenues to the people of Yemen.\r\n- An often-overlooked fact is that, while we have discovered and produced major deposits of oil, we have also discovered almost twice as much energy in the form of natural gas.\r\n- While a market has not yet developed for Yemen's vast natural gas reserves, Hunt Oil Company is proud of its record of saving and preserving gas for Yemen's future needs. Over 96% of all the gas that has come to the surface as oil was being produced has been re-injected into the ground to be saved for a time in the future when Yemen will have secured a market for its natural gas.\r\n- Hunt Oil Company is also very proud of the fact that we currently employ over 1,100 Yemeni nationals, which represents 90% of our workforce here. Yemeni personnel occupy important positions from senior management positions in Sana'a to important positions in the field.\r\n- Hunt Oil Company is also of the fact that in many different ways it has been of assistance to the Republic of Yemen over the years in ways that have nothing to do with the production of oil.\r\nThese are all accomplishments in which we can take great pride,” said Mr. Hunt.
\r\n”Virtually none of these accomplishments came easy, however. Not only did we initially have to overcome the conventional wisdom that oil did not exist in Yemen, but also subsequently we had to overcome a number of physical challenges in terms of developing the fields in the Mareb basin and building the pipeline and all of the infrastructure associated with it.”
\r\n”Additionally, political events were not always helpful to our efforts. Hunt Oil Company is proud of the fact that we stood firm when the Yemen Civil War occurred in 1994. That was an extremely difficult time in the history of Yemen – but Yemen, as a country, is not unique in experiencing difficult times of this similar period of discord – including the United States. What is important is that in difficult times of that nature, one learns who your real friends are – and who you can count on when times are tough. Hunt Oil Company proved that it was – and is – a true and loyal friend of Yemen and I am proud of our company who stood firm in support of President Saleh and the Government of Yemen during those difficult times. Even after the civil war was over, there have continued to be periods of time when enemies of the government and the people of Yemen have attempted to interrupt our operations – but with the determination of our company, and the assistance of the government, our operations have successfully continued.”
\r\n”I believe it is always important to acknowledge and to celebrate the past, but I am an even stronger proponent of looking forward and building a strong foundation for a successful future. In that regard, I am extremely pleased and proud to be here with you today and to be able to talk about the future.”
\r\n”As we speak, new seismic activity is being completed in the Mareb PSA – Once again with the active support of the government, as was the case when we began our first seismic efforts in 1981. Today we are using new technology – both in the deserts of Mareb and in seismic processing centers back in the United States – technology that was not available to the industry just a few short years ago. We are both hopeful and optimistic that our new prospects which we will drill in the years to come add to Yemen's oil reserves and its exports to the oil markets of the world.”
\r\n”In closing, I would like to repeat that what is really important about our celebration today is not the fact that Hunt Oil Company discovered oil in Yemen 20 years ago, but rather that, together, we proved what positive things can happen when a government and a private sector company work together in a close and cooperative manner such as has been the case with Hunt Oil Company and President Saleh and the Government of Yemen.”
\r\n”In the case of Hunt Oil Company's experience in Yemen, everyone associated with our work has benefited. We are thus very proud of our past here in Yemen, but, more importantly, we are even more optimistic and determined to our future.”
\r\nMinister of Oil, Dr. Rashid Barabba'a delivered a speech in which he said the oil discovery formed a new stage that developed the national economy under the leadership of President Ali Abdullah Saleh, who pays special attention to the oil sector.
\r\nHe then reviewed achievements of the oil explorations in Mareb and Al-Jouf between 1984 and 1990 as well as the increase of the number of international oil firms in Yemen.
\r\n”Last year, oil sales reached $2.5 billion,” he said.
\r\nHe reiterated the positive results of the cooperation between Yemen and the American company such as setting up the oil refinery in Mareb, which plays a key role in providing the local market with fuel. He also revealed a number of measures that will be taken by the ministry to benefit from oil and mineral wealth to realize the goals of social and economic development by extending investments in the field of oil and gas.
\r\nMr. Wyndell Caviness, Vice President and General Manager of Yemen Hunt Oil Company, also spoke at the ceremony: “It is indeed an honor to be here today, along with the Minister of Oil & Minerals, Dr. Rashid Barabba'a, Mr. Ray Hunt, Chief Executive Officer of Hunt Oil Company and Mr. Khalid Al-Khader, deputy General Manager of Yemen Hunt Oil Company.”
\r\n”As I reflect back over the last 20 years,” Mr. Caviness said, “the Republic of Yemen and Yemen Hunt Oil Company have had quite a success story, together with our partners at Exxon Yemen Incorporated and SK Corporation.”\r\n \r\n”Over the last 20 years the company managed to build a strong foundation by establishing a very unique atmosphere in the desert of Mareb.\r\n- We have drilled 594 wells.\r\n- We have built major facilities at Alif, Kamil and Al-Raja Fields, and numerous smaller facilities at other sites.\r\n- We have built a 10,000-bpd refinery in Block 18 at the Central Production Unit and a 220,000-bpd pipeline from the Central Production Unit to the FSO SAFER AT Ras Issa in the Red Sea.\r\n- We have produced 923 million barrels of oil, and 10.7 TCF of gas, of which 96% has been re-injected in the reservoir to save for the LNG project.\r\n- We continue to drill for additional oil reserves and we are nearing completion of a new 500 square kilometers 3D seismic program. \r\nWe look forward to the future and to a continued partnership with the government headed by the Ministry of Oil & Minerals,” said Caviness.
\r\n”Yemen Hunt Oil Company has been a leader in training national employees according to international standards. We have promoted our national employees into positions of real responsibility. When I first came to Yemen, our senior management group was mostly expatriate employees. Now when we have our weekly meeting, there are 23 managers in attendance. Only 6 of them are expatriates and the rest are national employees.”
\r\n”Most of all, I would like to take this occasion to remember all the people over the years who made this project a success, people from the Ministry of Oil & Minerals, the employees of Hunt Oil Company, Exxon, SK Corporation, the service companies like CCC, Gulf Interstate, Halliburton, Schlumberger, Nabors and a myriad of the other subcontractors without whom this project would not have been possible. No celebration of the successes over the last 20 years would be complete without honoring the people who made it happen. For those of you who represent the Ministry, the subcontracting companies here in Yemen, our partners and of course my fellow employees at Yemen Hunt Oil Company, I say 'thank you.' It has been a rewarding journey for us all.”
\r\nKhalid Ali Al-Khader, Deputy General Manager, first welcomed all the guests and conveyed his warmest congratulations to President Saleh on behalf of all the staff and employees of YHOC on the occasions of the anniversary celebrations of the Yemeni Revolutions. Addressing the guests, he spoke about the company's achievements and progress in Yemenization and the staff replacement that have occurred in more than 14 departments headed and operated by them for the past 20 years.
\r\n”The staff are working night and day with a strong desire to obtain more skills and involvement in production and to ensure the employees' safety in the oil fields.” Al-Khader also referred to the skills development in YHOC, noting that the company offers high quality training to staff as part of the company's Yemenization program, adapts itself and finds the fastest solutions to technical problems in operations areas, and works towards reducing expenses in different fields.
\r\n”In coordination with the Ministry of Oil & Minerals, the Yemenization program was subject to changes on a regular basis according to important and essential criteria, while making sure that there are no effects on the operations and production systems, which are the main steps in the company's development,” he said.
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