In Prime Minister Presence

MOM Announces Five International Winners of Eight Oil Blocks

DECEMBER 9– In the celebration organized by the MOM and on SEPOC’s first anniversary of taking over the Block (18), the MOM announced five international oil companies as the winners of concessions in eight blocks out of the fourteen open oil blocks encompassed in the Third International Bidding.

The celebration was attended by Mr. Abdulwader Ba-Jamaal, Yemeni prime minister, a number of ministers and MPs, members of the Yemeni Shura'a Council, and representatives of international oil companies operating in Yemen.

Mr. Ba-Jamaal delivered a speech in which tapped on a number of crucial points. Along with emphasizing that SEPOC was capable of measuring up to the challenges and overcoming all problems and barriers which had been created by the former operator of Block 18, he affirmed, “Today SEPOC has become an example which should be followed by other operating oil companies.”

He added, “The delay of carrying out the Yemenizing of posts in Block (18) made Yemen seek the assistance of foreign staff to do part of the work especially that which demanded foreign expertise.  In addition, All international companies operating in Yemen should be fully confident and sure that Yemen would deal with them according to the contracts and agreements between both parties. For sure, there would be neither delay nor violation of any contract and there would be no intention to harm any company or allow any harm to  blocks, we are going to follow a new approach and horizon in the agreements to be signed between Yemen and the respective oil companies. Not only that, the government would give great attention to the new blocks with particular emphasis on the offshore blocks. According to the High Economic Affairs Council such blocks demand special exploration and production operations especially if one considers the environment offshore rigs operate on.

He confirmed that the Yemeni government would base its relation with the new oil companies on serious and hard-work. “We will accept only companies that really prove to be hard working and really good operators. Actually, we must take this matter really serious especially that we have made promises to the whole world to meet our transparency commitments in oil and minerals production.”

Following that, H.E.  Khaled Mahfouth Behah, the minister of oil and minerals, delivered a speech in which he listed firstly the winning companies. He said, “The Indian Company, GSBC, won three blocks: block 19, Al-Jawaf governorate and blocks 57 and 28, Shabwah governorate. While MEDCO Energy, an Indonesian company, got blocks 83 and 82 in Hadhramout governorate, OM Company, an Austrian enterprise, won block 29, Al-Mahrah governorate; BARN Energy, a British oil accompany, won block 17, Aden governorate and DNO, a Norwegian firm, won block 84, Hadhramout governorate.”

Regarding the competition results as a big success particularly when one considers the technical and financial terms proposed by competitor companies, he maintained, “This achievement was the outcome of hard work and great effort exerted by the MOM and PEPA. To expand oil explorations, both bodies worked on promoting oil blocks and basing biddings on open competition processes. In doing so, the aim is to market the largest number of open blocks. What crowned all of that work was that five international oil companies were capable of securing 8 oil blocks, which would demand the drilling of 23 exploratory wells, the executing of a 6160 km 3-D seismic. In fact, the first stage would include a 1425 km seismic survey. More importantly, what distinguishes the Third International Bidding is that the volume of investment of the first exploratory stage would amount to $99 million and fifty thousand. 

More over, emphasizing that all operating companies in Yemen must follow the environmentally international standards, he stressed, “For the first time in Yemen all oil and gas blocks would be studied and assessed with respect to the environmental hazards and harms. This assessment would be carried out by an international company in cooperation with the PEPA for the last 20 years and for future years as well.” 

Besides indicating that the MOM along with the Egyptian oil ministry is working on creating a company specialized in oil-based services, the minister revealed that a plan is being outlined to construct a refinery in al-Maharah and Al-Mukalla and that such refinery need not be governmental. He further said that SEPOC would operate a floating oil tank of a 3 million barrel capacity of crude oil in Ra’ess Issa port.

In his speech, Mr. Abdulmalik A’lamah, oil deputy minister, indicated that SEPOC is the real foundation of Yemen’s national oil industry. It is the model demonstrating the MOM’s aspirations and expectations for achieving a better investment future.

He added, “It is extremely important that national outstanding and loyal cadres be encouraged and motivated to move forward and shoulder their responsibilities. Besides that, they should be supported and trained constantly so that they could be able to offer the best of experiences and exert all their potentials in different arenas and in running exploration and production oil and gas operations.

Engineer Mohamed Hussein Al-Haj, SEPOC’s executive GM, delivered a speech at the beginning of the occasion. After thanking the Yemeni leadership for providing his company with unfailing support which motivated the company to do its best in carrying out its duties, he confirmed, “SEPOC is now the second larges oil producer in Yemen despite of facing great problems and barriers which had been created by the block’s former operator. The company, having the capacity to overcome all barriers, is today the fairytale of a real national success. Constanly finding different obstavcles and problems left by the former operator, the company is able of handling and solving such problems.”

In addition, during the celebration, the mangers of the SEPOC departments displayed various presentation and detailed accounts of the company’s achievements as well as its future plans. They revealed that the company, in the first year of operating block 18, was capable of producing about 70 thousand barrels/day and 2.6 billion cubic feet of natural gas.