Dear Friends:
It is really a great pleasure to address all competent decision making circles as well as economic, scientific and political institutions in the oil and gas industry from all over the world.
First, I would like to give you a very brief background about Yemen, its people, history and infrastructure.
The Republic of Yemen, which proclaimed in May 1990, is situated in the southwestern part of the Arabian Peninsula, bordering Saudi Arabia to the North, the Red Sea to the West, Oman to the East and the Arabian Sea to the South. Sana'a is our Capital, Aden has become after the reunification of Yemen in 1990, the commercial capital of our country and Al-Hudaidah is the main port on the Red Sea. Yemen has a coastline of about 2200kms and a vast mountain range of the Southern Arabian Peninsula runs through Yemen with its highest peak, Hadur Shu'ayb at 3,760m. Topographical variations in this region give rise to a wide range of climatic conditions, with fertile highland plateaus interspersed with wadis. The population of Yemen is just over sixteen million, and Arabic is the official language. English is utilized in communication amongst business circles.
The history of Yemen stretches back over 3,000 years, and its unique culture is still evidence today in the architecture of its towns and villages. From about 1,000 BV this region of the southern Arabian Peninsula was ruled by three successive civilizations Minean, Sabaeen and Himyarite. Many foreigners knew Yemen as the land of Sheeba. Those three kingdoms all depended for their wealth on the spice trade, but by the first century BC, had been conquered by the Romans.
Both Christianity and Judaism were introduced into Yemen by the 4th Century AD. However, Islam was introduced in the 5th Century AD lasting up to now through the Ottomans rules that ended in 1636. Two hundred years after this in 1839, the British conquered Aden and it was then known as the Aden Proctorate. The British also made a series of treaties with local tribal rulers, in a move to colonize the entire area of Southern Yemen. In 1849, the Turks returned to Yemen and their power extended throughout the whole of that region not under the British rule.
This brings us up-to-date with the circumstances that crated present day Republic of Yemen. Oil is vital to our development and our current production is around 280,000 bbl/d provides the main source of income. Yemen contains oil in place of 10.9 billion barrels and had produced 2.7 Billion barrals in 2011.
With natural gas reserves of 18.2 trillion cubic feet, Yemen has considerable potential as a natural gas producer and exporter. The bulk of Yemen's gas reserves are concentrated in the Marib-Jawf fields.
Yemen currently has a crude refining capacity of 120,000 bbl/d from two local refineries. The refinery in Aden operated by Aden Refinery Company with a capacity of 110,000 bbl/d, while the other refinery at Marib operated by Yemen Refinery Company with a capacity of 10,000 bbl/d. However, Ministry of Oil and Minerals (MOM) is trying to upgrade the current capacity as well as to build new refinery at, Hadhramot.
The licensing of exploration opportunities in Yemen is neither new nor unfamiliar to us as we have long experience in Yemen in promoting oil and gas.
As early as the 1920’s and 1930’s, the discovery of several oil fields in the Arabian Peninsula and the gulf promoted oil companies to expand their efforts to seek for new locations. Many companies began to look to Yemen as possible new source of oil.
The first search in Yemen took place in 1938 when the Iraq Petroleum Company (IPC), at that time a British-owned company, concluded geological surveys in Hadramout and Mahara. The IPC collected seismic data, but no wells were drilled at that time.
Further attempts for oil exploration took place between 1952 and 1954 by the German Company, Prakla Deilmann, which conducted geological and geophysical surveys near the Tihama plains in the Western part of the country. The company also concluded a survey of the salif region of Yemen, although no wells were drilled in either of these sites. However, gravity and magnetic studies were conducted at that time.
From the early 1960’s until the mid 1980’s, several foreign oil companies conducted similar studies to further identify’ possible onshore and offshore oil exploration sites. These efforts led to the first major oil discovery in the summer of 1984, when Hunt Oil Company successfully drilled the wildcat well in the Marib Al-Jawf basin (Block 18). After the unification in 1990, many foreign oil companies have conducted exploration activities over an area of 235.000 sq km both onshore and offshore and seismic surveys over an area of 5 1,000 sq km. In adition. More than 103 exploration wells were drilled during the early 1990’s, which led to successful oil field discoveries, by Canadian Occidental over Masila (Block 14).
By May 1990, there were six foreign oil companies operating in Yemen. Following the reunification of Yemen in 22 of May 1990, Yemen has become more attractive to many international oil companies seeking access to oil-rich concession areas, particularly in the eastern and southeastern regions of the country. This ultimately led the MOM to study and evaluate those areas more fully, and to divide them into separate concessionaire blocks. The MOM received more than 86 proposals from different oil companies during the first three years. After an extensive review of these offers, the MOM. Signed about 88 PSAs (1990-2009).
The MOM continued to give more attention to exploration for additional reserves by offering more attractive contract terms to international oil companies. As a result 60 new PSAs have been signed and ratified during the years 1997 until mid 2004 plus many MOUs with other companies.
Finally, the MOM conferred the International Oil Companies (1.O.C.s.) an opportunity to become a significant producer of oil and gas for the worldwide market, since most of Yemen yet to be explored and still much room for more exploration.
Thank you all.
DR. Saeed Suleiman AL-Shamasi
Minister of Oil & Mineral