http://www.english.hadhramaut.info Oil and Minerals [The Source: www.mpic-yemen.org - ] Oil and Minerals Yemen belongs to a geographical region which contains more than 25% of the world oil reserves.  Despite failed oil exploration attempts in the past in various regions of Yemen, the outcome did not deter further efforts.  The year 1981 is a landmark year in the history of oil exploration in Yemen when a production sharing agreement was signed with the American Hunt Oil Company on oil concessions and exploration in the Mareb/Al Jawf region.  Further oil exploration continued in the region for several years before moving from seismic and geophysical surveys to the actual drilling of oil producing wells. Yemen joined the rank of oil producing countries in July of 1984.  The President of the Republic officially launched the first oil producing well in sector 18 in the Mareb/Al Jawf basin at a production capacity of 7,800 bpd.  A central production unit with its annexes was established in Safer.  In April, 1986, the Mareb oil refinery was established with a production capacity of 10,000 bpd.  The oil export pipeline was launched in October 1987.  The pipeline extends from Safer to Ras Eassa on the Red Sea spanning 440 kms.  The first oil shipment was exported in December of the same year. After the re-unification of the country, the government has put in place a more effective mechanism for the promotion of working oil companies in promising regions.  The mechanism urges companies to speed up the implementation of their oil exploration activities and moving into the production stage.  In 1990 and 1991, several oil projects were launched.  New commercial oil finds were discovered in Al Masyla sector 14 (Hadhramout).  Commercial production and export began in the last quarter of 1993 at an average of 120,000bpd.  Production and export facilities were established in Al Shehr comprising five tanks and a floating terminal for shipping crude oil.  Yemen’s production of crude oil thus increased to reach 78.9 million barrels per annum. West Ayad oil field resumed operations in 1992 at a production capacity of 8,500 bpd.  A pipeline of 210 km was constructed for the export of crude oil in the sector.  Production in sector 5 (Jennah) began in October 1996, at an average of 15,000 bpd.  In subsequent years, facilities for the following oil producing fields in the sector were developed:     *      Helywa field with a capacity of 70,000 barrels at a cost of $90 million;     *      Dhahab field with a capacity of 15,000 barrels at a cost of $38 million;     *      Al Nassr field with a capacity of 40,000 barrels at a cost of $62 million; Oil production from sector 10 in east Shabwa averaged 20,000 bpd.  In December of 1997, the sector production represented an addition to Yemen’s crude oil production reaching 132 million barrels per annum.  As a result, the total number of oil producing sectors increased to five to include the following: Company Sector Company Nationality Hunt (18) Mareb/Al Jawf American Canaidan Oxy (14) Al Masyla Canadian Total (10) East Shabwa French Jennah Hunt (5) Jennah Multi-nationality Al Nemr (4) Ayad Saudi registered in the UK With further drilling in production sectors, Yemen’s production of crude oil continued to increase reaching 143 million barrels per annum by 1999.  Ongoing work continues in developing new fields into production. Local Consumption of Oil Products The increase in local transport and the expansion of the road network have made it easy for the transport of people and goods all across the country.  In turn led to an increase in local consumption of oil products.  The Ministry of Oil and Minerals adopted measures to ensure the availability of oil products nationwide and at appropriate prices.  Aden and Mareb oil refineries refine around 90,000 bpd of crude oil to meet domestic consumption and export to neighboring countries.  The government has an ambitious program to upgrade the two refineries and straightening the capacities of the Oil Products Distribution Company. Gas The discovery of associated gas coincided with the discovery of oil in the Mareb/Al Jawf basin back in 1984.  However, the reserve of natural gas began to increase substantially with the expansion of oil explorations in the region to reach 14 trillion cubic feet in 2000.  The government has adopted clear policies on the maximization and proper utilization of such wealth for the development of the national economy in the short run and for generations to come.  The government constructed two additional units for compound extractions from light oil and LPG in oil operations in Safer.  A 26-km gas pipeline was constructed from Asad Al Kamel field to the loading station in Safer in addition to the implementation of phase 1 of gas substitution.  This project includes an LPG transport fleet and the establishment of several gas cylinder filling stations.  These projects have been able to cover the increasing LPG local consumption.  The private sector also contributed in the establishment of filling stations and other investment related to the use of gas as a substitute especially in factories and vehicles since gas is a clean source for clean environment. The government has also established the Yemeni Company for Liquefied Gas to undertake the construction and operation of gas liquification facilities, production lines, ship quays and export outside.  The Company represents a group of oil companies working in Yemen according to the following breakdown: The project is expected to export around 5.3 million tons of LNG per annum for 25 years through an export terminal and facilities in Belhaf on the Arabian Sea.  The LNG main pipeline is 320 kms with a 36-inch diameter.  The LNG project will also include a sub-pipeline to cover the needs of Sana’a and its suburbs as part of the government move towards the use of gas for power generation and petrochemical industries. Open Sectors for Exploration The number of international companies working in oil exploration in Yemen has doubled following re-unification and after oil was discovered in commercial quantities in the eastern and central regions.  The number is expected to increase in concessions open for investment in response to a promotion policy that targets Arab and foreign investment capital in oil and gas.  The following table lists the companies that have signed a production sharing agreement with the Yemeni government and concession sectors for the period 1990-1999: In order to attract Arab and foreign capital, there is the need to highlight available investment opportunities and concessional terms given to investors.  The government has adopted an oil promotional policy, which focuses on organizing a number of promotional activities for open investment concession areas.  The first oil and gas conference was held in Yemen in September 1998.  Major international oil and gas companies participated in the event.  The Ministry of Oil and Minerals signed an agreement with the American Geophysical Company to undertake the promotion of sectors (6,7, and 28) in Shabwa, sectors (25,26, and 27) in Hodieda and sector (38) on the island of Soctra.  There were two other promotional conferences in London and Houston in September of 1999 for the same sectors. The promotional policy has been a success in terms of :     *      informing international oil companies of the investment climate and investment prospects in Yemen;     *      several oil companies visited Yemen to investigate investment prospects in oil and gas;     *      two memorandums of understanding were signed with Oil Research Company of Australia and Adeer {sp.}of the USA on oil exploration in sectors 15 and 20. Minerals Sector The minerals sector witnessed intensive activities during the last ten years.  A comprehensive geological survey of Yemen was done on minerals and construction materials exploration.   Underground water basins were studied, geological maps drawn up in addition to surveying earthquake zones. Foreign investment in the minerals sector has picked up.  Investment licenses for mineral exploration were given to five companies covering different parts of the country.  Their initial investigation has led to the discovery of important minerals exploration prospects.  The five companies are:     *      Minearco {sp.} Co. is undertaking a feasibility study on zinc, lead and silver in the mountainous Nehm region in an area of 1,058 km2 and in Tabak in Shabwa in an area of 1,212 km2     *      Minora {sp.} Co. is undertaking a feasibility study on a gold mine discovered in Wadi Madn in Hadhramout in an area of around 340 km2     *      Canadian Mountain Co. is undertaking investigation and exploration of gold, nickel, cobalt, copper  and platinum group in Hajja, Sa’ada and Al Jawf in an area of 42,000 km2.     *      Felix {sp.} Mining Co. is undertaking investigation and exploration of nickel and copper in Al Hamoora region in Taiz in an area of 2,010 km2.     *      The Yemeni Spanish Minerals Co. is working in the exploration of aluminum and magnesium silicate in Al Mukala in Hadhramout. Geological mapping Geological mapping is important for geological surveys, mineral, oil and water exploration and in the construction and pavement of roads, bridges, and dams.  The Ministry of Oil and Minerals has collected data from satellite photos and implemented geological and hydrocarbon maps of several regions.  A number of sites of construction raw materials in a number of regions has been identified.  These raw materials are used extensively in industrial processing.  A small information handbook on such materials has been published. The Mining and Quarantine Bill number 50/1991 has helped in regulating mineral exploration.  The Bill has given the Geological and Minerals Survey Authority the mandate to issue investment licensing in the sector and supervision of technical operations.  The number of licenses issued reached 51 during 1992-1999. Laboratories are important scientific and research tools for mineral exploration activities. The government-owned labs are equipped with modern equipment necessary for undertaking chemical and microscopic analysis and sampling of mineral rocks.  Lab services cover government agencies and national and foreign companies working in Yemen  Earthquake Seismic Network The Earthquake Seismic Network has been established to survey earthquake zones in Yemen, the Red Sea and the Gulf of Aden.  The network includes several seismic recording stations in a number of regions in the country.  Work is underway to put in place technical specific designs to reduce the risk of human and economic loss in strategic airports, factories, ports and dams, etc. in case of earthquakes or tremors.  These stations provide readings of the size of tremors for investigation and monitoring. Training and Yemenization Program The government attaches increasing importance to the training and upgrading of the Yemeni cadre in the oil industry sector.  The move aims at enabling the local cadre to closely monitor and assess the activities of oil companies working in Yemen and to be able to efficiently operate oil installations eventually.  The government has established an oil-training center for building up the technical and administrative capacity of the sector.  The center conducts in-country training according to requirements and oil activity.  The government also dispatches a number of people on training abroad.