yemen’s tourism wealth - leaders magazinethe higher council of tourism approved in january the...

VOLUME 28, NUMBER 3 LEADERS 77POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC.

YEMEN

TOURISM IS CONSIDERED AN IM-portant resource and source offinances for Yemen, and we treat itas equally important as our fishwealth. This is even more impor-tant for us than oil, because our oilwealth could become exhaustedone day, but the tourism and fish-wealth sectors of our economy willnever be exhausted, and with goodleadership, will enable our countryto endure.

The Ministry of Culture andTourism and our tourism agencieshave the responsibility of imple-menting promotional programsthat encourage tourism in Yemenand, just like oil and fish wealth, we

have to take care of our tourism wealth by promoting this activ-ity. We must especially ensure that there are no obstacles thathinder this important sector of our economy. The governmenthas adopted many measures to bolster tourism, including:

� Applying a widespread security-network strategy in thegovernorates and provinces

� Providing the proper atmosphere for tourism so thateveryone involved shares the responsibility of making Yemenlook better in the eyes of tourists

� Promoting our desert, beaches, new hotels, and othertourist-related amenities

As many tourists know, Yemen has a cultural and architec-tural diversity that dates back to prehistoric times. Our capitalcity, Sana’a, is considered the birth place of one of the ancientinternational civilizations and a living museum of history; it ishome to some of the finest architectural art in the world. Whenwe talk about Sana’a, we are talking about a city that is a sourceof great pride to every Yemeni and Arab citizen, and to anyonewho is interested in humanitarian heritage and truly uniquearchitectural construction.

Insofar as investments in our tourism sector are con-cerned, we wish to encourage tourist parks, centers, andhotels. The country is now in the second stage of the restora-tion and renewal of the historic Cairo Castle in Taiz, which willneed facilities such as an open-air theater, different restaurants,a cultural museum, and a landmark that will show the inheritedhistory of the Yemeni people and the engineering and architec-tural arts by which Yemen is distinguished. We would also liketo repair and restore all the historic castles and forts through-out the country.

I would like to praise the Ministry of Culture and Tourismfor initiating new interest in Yemen’s culture and art, which ledto having Sana’a named as the capital of Arab culture in 2004.We are optimistic that this important designation will continueto focus attention on Yemen as one of the world’s showcasecountries.•

H.E. Ali Abdullah Saleh

Excerpted from a speech by His Excellency Ali Abdullah Saleh, President, Republic of Yemen

Yemen’s Tourism Wealth

Among the reasons tourists find Yemen so appealing are beautiful architectural sights like these.

YEMEN

YEMEN’S HIGHERCouncil for Tourism, ofwhich I am chair, hasdesignated the year2005 to be the “Year ofTourism Promotion.”

The Council hasalso established a taskforce headed by theMinister of Culture andTourism, the Honor-able Khaled Alruwais-

han. The task force also includes membersfrom all agencies concerned with tourism,as well as representatives from the privatesector, and will prepare draft resolutionsto determine priorities for enhancing thecountry’s tourism infrastructure and for

raising awareness among the public aboutthe importance of tourism.

In addition, the Council establishedanother task force, headed by the DeputyPrime Minister and Minister of Planning, theHonorable Ahmed Mohammed Sofan, tostudy the proposed plan and divide it intodifferent sections, so that revisions can bemade every three months. The Councildecided to refer its draft constitution to theCabinet for discussion and approval.

It is with great optimism that Yemenlooks forward to continuing our work toexpand opportunities for tourists who visitour country this year and in years to come.

The Higher Council of Tourismapproved in January the Tourism Promo-tion Plan 2005, which is oriented to

ensure upgrades to the tourism infrastruc-ture and improved tourist services.

The plan, endorsed in a meetingthat I had moderated, authorizes theTourism Promotion Council to draft anew tourism budget and requires a 50percent state contribution to promotionfunds.

The council took a number of mea-sures aimed at dealing with situationsdetrimental to visitors, such as reducingfees for entry visas for tourists by 50 per-cent. The Sana’a International Airport andsome land ports of entry will also beupgraded under the plan.

The council decided that tourism inYemen must be portrayed in a new andspectacular way.•

78 LEADERS VOLUME 28, NUMBER 3POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC.

Hon. AbdulkaderBagamal

By the Honorable Abdulkader Bagamal, Prime Minister, Republic of Yemen

2005: Year of Tourism Promotion

THE REGION OF THEbroader Middle East andNorth Africa (BMENA) isnow involved in steadyefforts to encourageopen and inclusive dia-logue with its partnersin the G8 countries, inorder to advance theuniversal values of hu-man dignity, democracy,

participation in civil society, economicopportunity, and social justice.

The call for partnership for progressand a common future in the BMENAregion at the Sea Island G8 summit inJune 2004 is gaining momentum, and afollow-up process has taken place fromNew York and Rome to Bahrain andRabat. This led to the first Forum for theFuture, convened on December 11, 2004,where regional participants agreed toexpand their already-strong cooperationin support of the region’s reform efforts.

Yemen has accumulated substantialexperience in adopting political and eco-nomic reforms. The country has achieved

genuine results in establishing a represen-tative, democratic political system, leadingthe way in the Middle East. From its estab-lishment in May 1990, the Republic ofYemen has experienced successful parlia-mentary, presidential, and local govern-ment elections. More than 20 political par-ties operate in the country, with hundredsof NGOs and dozens of independentnewspapers. Because of this democraticrecord, Yemen was chosen in Sea Island,together with Italy and Turkey, to design a“democracy assistance dialogue” aimed atproviding venues to encourage the grow-ing momentum for reforms in the region.

To that end, Yemen has expressed itsintention to host – next June – the firstjoint meeting of willing governments andcivil society organizations, and hopes tobecome the venue for the first regionalcenter for democratic dialogue.

During the deliberations at Rabat,Yemen has presented a major initiative forsmall- and micro-enterprises develop-ment, Strategy and Plan of Action, whichreceived the support of the forum and willbe supported through the IFC financial

facility to create opportunities for regionalentrepreneurs, especially women.

Yemen believes there is an urgentneed for countries in the region to stepforward and respond to homegrown aspi-rations for reforms, and to emerge aseffective partners in the global economy.The call for democratization and liberaliza-tion should be part of our efforts to pur-sue a just and durable peace in the MiddleEast, through the implementation of theRoad Map and the establishment of anindependent Palestinian state.

In Rabat, Yemen expressed its com-mitment to democratic reforms and askedthe international community to allocatefinancial resources for the initiativesraised by BMENA countries, such as illiter-acy eradication, entrepreneurship andbusiness training, microfinance enterprisedevelopment, and tourism initiatives.Yemen stressed the need to establish flex-ible mechanisms for dialogue, which willgive participant countries the chance toshare experiences and develop activitiesthat will lead to a real regional partnershipfor democratic and political reforms.•

Taking the Lead in Regional Reforms

By the Honorable Dr. Abubaker A. Alqirbi, Minister of Foreign Affairs

Hon. Abubaker Alqirbi

YEMEN


THE REPUBLIC OFYemen sits at the south-western tip of the Ara-bian Peninsula and Asiaoverlooking the Bab AlMandab Strait that con-trols the entrance intothe Red Sea. Yemenalso enjoys a coastalstrip spanning 2,500kilometers on the RedSea, the Gulf of Aden,the Arabian Sea, and

the Indian Ocean, with vast fish wealth andmarine life. The diversity of the landscape– ranging from highlands, lowlands, coasts,and desert – provides diverse climatic con-ditions and varying temperatures. Suchfeatures make Yemen a promising placefor substantial investment prospects and avirgin land for many economic activities,including mineral exploration.

Moreover, the transformation into amarket economy and the ongoing eco-nomic reforms have created conducive

conditions to investment. An investmentlaw was issued in 1991 to create an institu-tional and legal infrastructure. The law isclear and transparent, leaving no room forany improvisation or disparity of treatmentamong competitive projects. It has alsoprovided a set of incentives – financial andnon-financial exemptions for investmentprojects. The investment law has madesure that potential investors get sufficientguarantees guarding them against nation-alization, seizure of the project, impositionof project arrest, or freezing of projectfunds except through the judiciary system.Moreover, the Republic of Yemen hasjoined a number of regional and interna-tional investment guarantee institutions ina bid to strengthen mechanisms safeguard-ing investors’ projects and legitimate rightsagainst non-commercial risks. Other lawsof strong relevance to the creation of anappropriate and attractive climate forinvestment have been issued such as theLaw for Certified Accountants, JudicialAuthority, Arbitration, Deliberations, Com-

mercial Registration, Land Registration,and the Commercial Companies Bill.

To improve the implementation ofreforms, the government, through abroad participatory process, drafted acomprehensive and long-term vision, inaddition to clear and specific policies, andcommitted to their implementation.Yemen’s Strategic Vision 2025 aims atimproving human development and rais-ing standards of living for all Yemenis.Within this context, Strategic Vision 2025has targeted upgrading Yemen to matchthe group of countries with mid-levelhuman development, diversified econ-omies, and comprehensive development.

To obtain this target, Yemen has toaccelerate its economic development andincrease its GDP growth to an annual aver-age of 9 percent. This acceleration ofgrowth should be accompanied by control-lable population growth, leading to a situa-tion where the Yemeni economy couldachieve an annual per capita GDP growthof 2.5 percent in the first few years.•

By the Honorable Ahmed Mohammed Sofan, Deputy Prime Minister and Minister of Planning

Yemen’s Development Potential

NO MORE THAN 150 KILOMETERS FROMSana’a, 2,700 meters above sea level in the Ansarea of the Dhamar Governorate near HammamAli (one of the Yemen’s most significant touristresorts, famous for its warm mineral springwaters, and a place of relaxation and medicaltreatment for Arabs and foreigners), there is avalley rich with onyx that is being extracted fromthe deep interior of the surrounding mountains.

This area is known for its production of thisglittering precious stone, a stone that captures the mind andheart, not unlike diamonds and gold. Yemeni onyx has a specialirresistible charm and magic, and is distinguished by the variousdiversified colors it exhibits – from dark andlight red to brown, and from ink blue to white.

The main market for onyx is at the Bab-al-Yemen bazaar in Sana’a. The number of cus-tomers from the Gulf States, Saudi Arabia, Iran,Iraq, and Jordan desirous to acquire it farexceeds that of Yemeni customers. It will be interesting to see ifonyx becomes the next “mocha coffee” that carries the glory andreputation of Yemen to all markets of the world!•

The Onyx Valley

By Mahbub Ali, Middle East Representative, LEADERS Magazine

DEVELOPING TOURISM DEPENDS ON SECURITYand stability in the world. Many tourist destinationshave suffered from crises due to terrorist acts orreligious influences, which some gangs try to hidebehind to justify their evil, and in effect, this harmstheir own people before hurting others.

Terrorism is based on extreme ideology,which excludes others and calls people to fightinstead of building relationships of mutualrespect. This heightens terrorism and increases its

activities. Such cultural elements produce mentally, psychologically,and socially ill people, seeking to destroy everything before them.

Extreme ideology and black terrorism have resulted in acounter-extremist ideology in which each party seeks to destroy theother, replacing love with hatred. This threatens the world’s stabilityand hurts the tourism industry in every country in the world.

To save the tourism industry, different groups of people haveto be involved in a battle against terrorism. There has to be a culturaland educational campaign to educate people so they can welcomeothers and encourage peaceful and open contact with them. Atourism industry cannot be developed in a country where people donot welcome their guests, but Yemen always welcomes guests.•

Tourism and Terrorism

By Yahya M.A. Saleh, Chairman, The Association of YemenTourism and Travel Agencies (AYTTA)

Hon. AhmedMohammed Sofan

Yahya Saleh Mahbub Ali


YEMEN

EDITORS’ NOTE With morethan 20 years’ experience inYemen’s oil and gas industries,Rasheed Saleh Baraba wasappointed to his current postin April 2001. He previouslyserved as deputy minister of oiland minerals. Baraba earnedhis Ph.D. in petroleum geologyfrom the University of Moscow,and has published numeroustechnical articles and researchpapers.

What are the most important areas ofinvestment in Yemen?

A quick look at the structure of theYemeni economy and aspects of the coun-try’s development will show that there arenumerous sectors that can attract capitalto Yemen, but the most significant onesare the oil and gas sectors, the industrialsector, the agricultural sector, and thetourism sector.

Could you elaborate more on in-vestment in the oil sector?

As the oil sector is one of the mostimportant sectors of the Yemeni econ-omy, the state has paid special attentionto it, particularly through encouraging andattracting local, Arab, and foreign capitalfor investment in this sector.

What measures have been takenby the Ministry of Oil and Minerals toattract investors and introduce in-vestment opportunities in this field?

The Ministry of Oil and Minerals hasfostered a number of arrangements andprocedures to introduce investmentopportunities in the field of oil. The mostimportant of those procedures are:

� Convening international confer-ences and contracting international com-panies to promote the open blocks

� Preparing the necessary geologicaland economic studies and information,and establishing a data bank to maintainand watch over all that pertains topetroleum operations in Yemen

� Dividing the petroleum map intoblocks by conducting studies and issuingpromotional brochures about them

� Meeting with oil companies and

convincing them to invest inthe open blocks through theprovision of the necessary in-formation and studies on theseblocks

� Forming committees tonegotiate with companies thatwant to invest in this field, anddeciding upon conditions thatbest serve the interests ofYemen and those companies

What is your outlook forfuture investment in Yemen?

I think that because of theunified state and the dissemination of theatmosphere of freedom, democracy, partypluralism, and free-market activity – inaddition to a flexible investment law – andbecause of the power of order, law, andstability, the futureof investment inYemen now looksmore promising thanever. Yemen is still avirgin country withextensive tourism re-sources and a histori-cal heritage that re-mains unexploited.There are huge trea-sures that have notyet been explored.

What are themost significantinvestment oppor-tunities availablein Yemeni oil andgas?

There are manyattractive investment opportunities in thefields of oil, gas, and minerals. The mostprominent of these are oil exploration inthe promising open blocks onshore andoffshore, the oil-and-gas-based petro-chemical industry, and the exploitation ofmineral resources in economically feasiblequantities.

What has been the most impor-tant oil-exploration activity in Yemen?

Oil-exploration work in Yemen goesback to the ’30s – more precisely, to 1938,when the Iraq Petroleum Company carriedout seismic surveys in some areas of

Yemen. This was followed by intermittentsurveys by other foreign companies at theoutset of the ’50s and ’60s, which contin-ued during the ’70s and ’80s, and resultedin the following:

� In 1984, the American Hunt OilCompany announced the first commercialexploration of oil in Yemen, in block 18 inMareb/Al-Jawf. The development processcommenced with the erection of surfacefacilities and the construction of a pipe-line to the Red Sea.

� In 1989, oil was discovered by theSoviet company Technoexport Ltd. inthree oilfields in Shabwa governorate,namely West Eyad, East Eyad, and Amal,block 4. Surface facilities were erected andan export pipeline was constructed toBelhaf on the Arabian Sea.

� In 1991, commer-cial exploration was real-ized at Sona oilfield,block 14, Al-Masila, byCanadian Occidental Pe-troleum Co. [CanadianNexen Inc.], which wasfollowed by a number ofother discoveries. Surfacefacilities were erected andan export pipeline wasconstructed at Al-DhabbaArea, Hadhramout gover-norate, on the ArabianSea.

� In September1996, oil was discoveredat Hilaiwah oilfield,Jennah block 5, by a con-sortium of oil companies

operating in the block. Surface facilitieswere erected and production in this blockwas connected by a pipeline extending tothe concession area of Hunt Oil Companyin Mareb/Al-Jawf sector. Export of produc-tion from this oilfield takes place throughthe pipeline Yemen-Hunt Co., which ex-tends to the Red Sea.

� In 1998, oil was discovered at Kharir,Atoof, and Wadi Tarba [block 10, EastShabwa] oilfields by Total Yemen [TotalFina Elf] and production in this block wasconnected to block 14 at Al-Masila.

� On December 18, 1999, the Nor-

Hon. Dr. Rasheed Saleh Baraba

An Interview with the Honorable Dr. Rasheed Saleh Baraba, Minister of Oil and Minerals

Oil and Minerals:Full of Promise

wegian DNP Co., operating in Hawareem,block 32, announced the discovery of oil. Production and exportation through theAl-Masila pipeline commenced in No-vember 2001.

� The British company Dove Energyannounced commercial production fromblock 53, Easr Saar on December 20, 2001.Pumping, production, and exportationthrough the Al-Masila pipeline began atthe beginning of 2002.

� On October 14, 2003, the Americancompany Vintage Petroleum announcedcommercial production from block S-1 atDamis. Production and exportation is ex-pected via the Jennah pipeline during thefirst quarter of 2005.

� On December 17,2003, Canadian Nexen Inc.announced commercialproduction from block 51East Hagr. Production andexportation is expected viathe Al-Masila/Al-Shihrpipeline during the firstquarter of 2005.

Can you identify dis-tinct phases in the devel-opment of Yemen’s oilindustry?

Yemen’s oil industryhas passed through fourphases that differ from eachother with regard to theirqualities, type, and theintensity of work involved,and also in the level of state institutionsinvolved, their structural setups, technicaladministrations, and available capabilities.

The first phase, extending from theend of the ’30s until the beginning of the’60s, represents a primitive phase, charac-terized by the absence of the basic condi-tions for any economic activity. At thattime, Yemen was divided into two parts,the south, under the rule of the British,and the north, under the rule of theImam. Economic activities were primitiveand disorganized, and there was a com-plete absence of infrastructure.

In this context, geological informationtrips were undertaken by Western special-ists representing various companies. Theobjective of those trips was to identify thegeneral features of the surface geology ofYemen and the different sedimentary lay-ers. Some of those geologists produceddescriptions of the sediments in some east-ern parts of the republic, and even gavethem names. The significance of this phaselies in the fact that it represented the firststep to acquaint Western internationalcompanies with the general and physicalnature of the geology of Yemen.

The second phase of development ranfrom 1960 to 1990. At the outset of the ’60s,through communication between these var-ious scientific missions, the first geologicalmap for the eastern parts of Yemen wasdeveloped. Sedimentary layers were dividedand described and their ages were identi-

fied. That represented the first stratigraphiccolumn of sediments. The late Lebanesegeologist Ziyad Baidhoun was the first per-son to describe the geology of Yemen in ascientific and organized manner – particu-larly the Hadhramout and Al-Mahara areas,which form an important region within thegeography of Yemen – and his work repre-sents a scientific reference to this day.

In the ’60s a number of internationaloil companies entered Yemen to explorefor oil in North Hadhramout/Al-Maharaand the Red Sea area. They implementedsome geophysical surveys and drilled anumber of exploration wells. The Ameri-can Mecom and Pan American Oil compa-

nies were pioneers in the field. They werethe first international companies to engagein this sphere. Mecom drilled five explo-ration wells in the area to the south of theRed Sea. Pan American drilled six wells anddiscovered the first deposits of hydrocar-bons at Tarfit Well-1, North Hadhramout.

Also in the ’60s, some internationalcompanies entered Yemen and engagedin business partnerships with Yemenicompanies. Among the most important ofthose companies were the Soviet com-pany Technoexport Ltd. and the Italiancompany Agip, which undertook anadvanced exploration program in themarine Mukalia/Saihout area, whichinvolved surveying 12,000 kilometers ofseismic line and drilling nine explorationwells offshore. The first oil well was estab-lished in that area: Sharma 1, producing3,500 barrels per day.

From the social and economic pointof view, that phase represented a transi-tion period in the history of Yemenwhich could be described as a period ofstruggle for dominance, after the transferof authority from the British and Ima-mate to young Yemeni governments. Thepolitical unrest was a negative factor,which did not encourage economic activ-ity in any industrial sector, including theoil sector.

By the end of the first phase, Yemenhad become known in international eco-nomic circles as a virgin country situated

in the vicinity of the main sources of oil inthe Middle East. Social and economic con-ditions started to become much betterthan they had previously been. Therewere indicators for political stability, par-ticularly in northern Yemen.

All these conditions encouraged anumber of international oil companies,such as the American Hunt Oil Company,the French companies Total and Elf, Cana-dian Nexen Inc., and others to procurenumerous concessions in Yemen. Whatcharacterizes this phase is the discoveriesof oil in commercial quantities in the Al-Sabatain reservoirs in the Mareb/Shabwasector. Geological understanding of the

sediments of Yemen waspromoted as a result ofregional surveys, carriedout by several companiesin the form of integratedprojects throughout theentire country. For the firsttime, sedimentary reser-voirs were divided accord-ing to their physical geog-raphy and their geologicalages, and sedimentary andstructural properties wereidentified.

At the explorationlevel, geological and geo-physical surveys wereimplemented in variousareas, and a large numberof exploration wells were

drilled. This development was accompa-nied by the promotion of the structures,the activity of national oil institutions, andthe creation of a national cadre. For thefirst time, the oil industry emerged inYemen in a new form and style. Oil pro-duction in Yemen during this periodranged between 7,254 and 189,179 barrelsper day.

What characterizes this phase fromthe political and economic point of view isthe appearance of the Yemeni state in itsmodern form in the north, and the tran-quil conditions that assisted in the growthof different economic sectors. Universitiesand scientific institutions were erected,the number of people in the nationalcadre increased, and the living standard ofthe Yemeni people improved. However,in southern Yemen, a struggle for powerand authority in 1986 led to an increase ineconomic and political difficulties, whichaffected stability in the south until theemergence of the unified state of Yemenin 1990.

What about the third and fourthphases of development?

The third phase ran from 1991 to1994. The emergence of the Yemeni statesignificantly encouraged internationalinvestments in the various economic sec-tors. The oil sector drew the attention ofthe world. Many international companiespounced upon oil-exploration conces-sions. Giant oil companies, such as Exxon,


Chevron, BP, Shell, and others, enteredYemen for the first time with intensiveexploration programs.

The geographical area was alsodivided into concession blocks in a scien-tific manner. At an institutional level, thePetroleum Exploration and ProductionAuthority was formed as a technical organto supervise the various activities in thefields of exploration and production.

At a legal level, production-sharingagreements were developed, and theirfinancial terms and conditions wereimproved to become in line with similaragreements in the United States.

This phase is characterized by the fol-lowing elements:

� Stability, represented by the emer-gence of the unified state

� Exploration of oil in four otherblocks

� An intensity of exploration work� An increase in the number of

companies� The promotion of infrastructure in

Yemen� The development of an institutional

structure� An increase in the number of peo-

ple in the cadre� The construction of a petroleum

database� The adoption of new policies to

match the policies that prevail in the inter-national oil industry

We are still in the fourth phase, whichbegan in 1995. Despite the abortive seces-sion attempt that threw the country into abloody war in defense of unity, the unifiedstate prevailed. Political and economicconditions were brought back to normal,and difficulties emanating from that warwere overcome in a respectable period oftime. The number of oil companies inYemen continued to increase, and oil andgas explorations advanced significantly.

This phase is characterized by the fol-lowing elements:

� The re-division of the oil-blocks mapin accordance with scientific principles

� Improving financial terms andconditions of the production-sharingagreements

� The development of the concept ofthe geology of Yemen through considera-tion of geological samples of sedimentaryreservoirs

� The reformation of economicpolicies

� The signing of more than 25 pro-duction-sharing agreements

� The entry of 14 international oilcompanies engaging in 25 blocks

� The drilling of 1,355 wells, 377 ofwhich are exploration wells and 1,068 ofwhich are development wells

� The conducting of 167,880 kilome-ters of seismic surveys, out of which4,955 kilometers are three-dimensionalsurveys

� The announcement of discoveries

of oil and gas in commercial quantities insix blocks

� Production from five blocks: block5 [Jennah Hunt]; block 10 [Total]; block32 [DNO]; block 53 [Dove]; and block S1[Vintage]

What about refining activity andthe petrochemical industry inYemen?

Yemen has two refineries for crudeoil. The first is the Aden Refinery, whichwas established by BP in 1952 and wascompleted in 1954, with a productioncapacity of 170,000 barrels per day, whichis equivalent to 8.5 million metric tons peryear. The ownership of the refinerydevolved to Yemen on May 1, 1977. Therefinery’s products are benzene, diesel,gas oil, and kerosene.

The second is the Mareb Refinery,which was established in 1986 with a pro-duction capacity of 10,000 barrels per day.Its supply of crude oil comes from block18, Mareb/Al-Jawf. Its operation wasundertaken by Hunt Oil Company until1995, when the company’s agreementcame to an end. However, the companycontinued operating it until the beginningof 1999, when its operation was trans-ferred to Yemeni OilRefineries Company.The products of therefinery are benzene,diesel, and gas oil.

There are plans toerect two new refineries.The first of these is theAl-Dhabba Refinery Pro-ject in the Hadhramoutgovernorate, with a pri-mary production capac-ity of 50,000 barrels per day. The project islocated at Al-Shihr, northeast of the Al-Dhabba area, and it will be executed by Hadhramout Refinery Company. Thesecond new refinery is the Ras Issa Refin-ery Project in the Hudeida governorate,with a primary production capacity of45,000 barrels per day. The project islocated at Ras Issa.

There are a number of other invest-ment projects in this field, such as theestablishment of a hydrogen distillationunit at the Aden Refinery, a study of theazote fertilizers industry, a study of thedetergents industry, the upgrading ofthe Aden Refinery, and the expansion ofand upgrades to the Mareb Refinery.

What about exploration in thefield of natural gas? What are themost significant investment opportu-nities in that area?

Exploration for natural gas in Yemenstarted at the same time as the discoveryof oil in 1984 at block 18, Mareb/Al-Jawf.With the continuation of explorationoperations in numerous blocks, andexpansion in developing oilfields, capaci-ties in the sphere of energy were en-hanced through the increase of oil andgas stocks and reserves in numerous

blocks in the republic. The stocks of gasare estimated at 43 million tons. Thequantity liable to extraction from suchreserves of liquefied gas, to the end of2002, as per present efficiency coeffi-cients, is about 18 million metric tons.

Due to the significance of gas and itsrole in the development of the nationaleconomy – in the development of localindustries, household use, and securingfinancial resources for economic and socialdevelopment in Yemen – the governmenthas exerted, and is still exerting, continu-ous efforts to promote the gas sector.

The discovery of ample reserves ofgas has led to a considerable increase inits exploitation. The Ministry of Oil andMinerals encourages investment in thisfield, through the erection of productionfacilities for liquefied natural gas [LNG]and the provision of means of transporta-tion and other necessary inputs, with theaim that liquefied petroleum gas [LPG]will replace other traditional sources ofenergy, such as wood, petrol, and kero-sene in some areas.

For the ideal exploitation of the hugereserves of natural gas, an agreement wassigned in 1997 for implementing a natural-

gas liquefaction andexport project, in whichthe ministry, representedby Yemen Gas Company,shall contribute 23 per-cent. This project, whichis the largest to be imple-mented in Yemen, willcontribute a considerableamount to the nationaleconomy, if executed.

In addition to thisproject, there are other numerous invest-ment opportunities in the field of naturalgas, such as:

� The exploitation of natural gas lo-cally as a fuel for factories, for transporta-tion, and for electric-power generation;

� The exploitation of natural gas toreplace LPG as a fuel for household cook-ing and heating, especially in planned andorganized towns. The LPG would then bedirected to villages and remote areas foruse as a household fuel and for lighting,replacing wood and kerosene;

� The exploitation of natural gas as araw material in the petrochemical and fer-tilizers industries;

� Promoting the infrastructure nec-essary for a number of industries thatrely on gas as a fuel, through the erectionof a natural-gas pipeline network in therepublic.

Without a doubt, growth in the useof natural gas as an alternative to otherfuels will significantly benefit the environ-ment. Therefore, developing this field is agreat investment in the interests of thecommunity. It will drastically reduce theenvironmental-pollution rate, which willreflect positively on the health of individu-als and the community at large.•



INTRODUCTION Yemen is located in thesouthwestern part of the Arabian Penin-sula. Historically, Yemen boasts one of theworld’s oldest civilizations, as depicted bythe outstanding remnants of the Kingdomof Sheba, the incredible dam of ancientMarib, the Tawilan historical water cis-terns in Aden, and the splendid skyscrap-ers of Shibam Hadramout. All of these,and other historical landmarks, reveal thedistinguished role Yemen played as animportant bridge of trade between Eastand West, for which it earned the mythicalname, Arabia Felix.

Diverse physiographic features de-fine Yemen as a land of splendid naturalbeauty – rugged deserts, soaring moun-tains, and seemingly endless coastlines.Yemen’s trades vary too, from the fisher-men plying their vessels along the coaststo the tribesmen cultivating their cropsalong the magnificent terrace mountain-sides; from villagers following the mostancient of traditions to modern citydwellers enjoying the latest facilitiesadvanced by technology.

All in all, Yemen is very much a devel-oping nation with a unique past, a promis-ing present, and an ambitious future. Thediscovery, development, and productionof Yemen’s oil, gas, and other mineralresources are enhanced by the accom-plishment of gigantic projects like theYemen LNG Project, the Aden Free Zone,and the associated Industrial DevelopmentZone. All of these form an integral chapterin the continuing story of Yemen’s glori-ous past and its ambitious future.

Exploration Activities in YemenThroughout its geological history, Yemenhas been an integral part of the Arabianshield. The accumulated information for-warded by the geological studies of theArabian Peninsula from the 19th centuryonward shed more light on the variousaspects that prove the intimate relation-ship between the prevalent geologicalstructures, their common origin, andcharacteristics. Needless to say, the abun-dant reserves of oil and gas in differentparts of the Arabian Peninsula encouragethinking about their origination in Yemen.

Today, there are continued efforts spon-sored by the Ministry of Oil and Mineralsto trace and evaluate the geological eventsthat led to the creation of oil-producingregions in Yemen.

Current exploration activities inYemen have resulted in the discovery ofconsiderable reserves of oil and gas and,in a way, have provided additional verifica-tion of the fact that Yemen’s sedimentarybasins are promising and representremarkable opportunities for investmentin this field. Yemen’s geographical exten-sion over a wide area – both onshore andoffshore – provides an additional dimen-sion to its economic potential.

The discovery of major oil reserves inYemen’s Marib-Shabwah basin by theHunt Oil Company in the mid ’80s, andthe striking discovery in Masilah by Cana-dian Occidental (now Canadian Nexen),made realistic the promising hydrocarbonpotential in this country and, in a way,have forced explorers to rethink theirideas about this region’s petroleum geol-ogy. It has raised the question: Are thereany more oil-rich areas still to be discov-ered in Yemen? It is worth mentioningthat the petroleum concession activitymap covers 415,426 kilometers, divided

into 84 blocks, which constitutes about 80percent of the land mass of Yemen.

The present status of oil-explorationactivities led to the following develop-ments: seven oil-producing blocks, twosupplementary producing blocks (underdevelopment), proven gas reserves in threeblocks, and initial oil discoveries in the Gulfof Aden (Sharmah) and in many blocks inHadramout (north) and Hawarim.

Recent work has shown that Yemen’sremising sedimentary basins owe theirexistence to the breakup of the Gond-wana supercontinent, which began about150 million years ago at a time when Ara-bia was still connected to Africa. In theRed Sea and Gulf of Aden, oil and gasdeposits have also been found, althoughnone of these are of commercial size.However, studies of plate tectonics in thisregion, sponsored by Petroleum Explo-ration and Production Authority (PEPA) incollaboration with international oil com-panies (IOCs), would unravel the ambigu-ity of the tectonic events and the resultscould guide explorers to new reserves.

Petroleum Exploration and ProductionAuthority (PEPA)PEPA is considered one of the major units

Nabil Saleh Al-Gawsi (left) and the Honorable Dr. Rasheed S. Baraba, Minister of Oil and Minerals

By Nabil Saleh Al-Gawsi, Chairman, Petroleum Exploration Production Authority (PEPA), Sana’a

Oil and Gas in Yemen

YEMEN

of the Ministry of Oil and Minerals, underthe direct supervision of the minister.The main tasks of PEPA are centered onthe supervision of working IOCs in theexploration and production fields. Onthis basis, PEPA carries out its tasksthrough a specialized technical teamworking within its departmental frame-work. It also implements and carries outfollow-up programs to check the perfor-mance of international oil and explo-ration companies working in the country,including receiving, collecting, and filingdifferent information about the technicalactivities of the exploration and produc-tion stages; participating in the prepara-tion and evaluation of the geological andgeophysical studies and geochemicalanalyses of the sedimentary basins in thecountry, as well as the preparation of eco-nomic and technical studies for oil andgas reserves; continually supervising thestrict adherence to the rules and regula-tions of the environment in collaborationwith the concerned parties; and supervis-ing the operations of international oilcompanies working in the oil-producingconcessions in the country.•

THE PETROLEUM SECTOR AND THEcurrent explorations in Yemen are in aboom. Work in this aspect has been on-going through the implementation of awell-researched and transparent plan.Petroleum explorations in several blockshave started unveiling their richness inmany areas of Yemen, and other fields aregoing through further extensive technicalinspections.

Amid all of this, the Ministry of Oiland Minerals, represented by the Petro-leum Exploration and Production Author-ity (PEPA), is implementing an ambitiousprogram with a number of oil exploration

and production companies. After thetremendous success that followed thegovernment’s worldwide campaigning,dozens of foreign and Arab companies arecurrently competing to win bids to investin the blocks still open for internationaltender offers.

This battle for development and con-struction is led by President Ali AbdullahSaleh and is carried out by the Yemeni gov-ernment. The oil and mineral sector willlead the way in the comprehensive eco-nomic development that Yemen has com-mitted itself to achieve. This is done withthe understanding that oil will maintain its


International CompaniesCompete to Operate

Oil BlocksAn interview with Nabil Saleh Al-Gawsi, Chairman, PEPA, conducted by Abdulqawi

Al-Odeini, Director, Department of Information, Ministry of Oil and Minerals

position as the main source of income forthe country and provides the hope thatdrives overall development in Yemen.

In this interview, Nabil Saleh Al-Gawsi, chairman of PEPA, points out thesuccesses achieved in the Masila andShabwa oil basins and the positive resultsso far unveiled concerning explorationworks in various oil blocks. Al-Gawsidetails the conditions of the blocks thathave been re-divided in the areas ofblocks S1 and 51. He presents the stagesof the first and largest international tenderof its kind in exploring oil and gas in

Yemen, and talks about the companiesthat presented their bids and that werequalified before the announcement of thefinal result.

Al-Gawsi mentions the stages ofinternational campaigning for some oilblocks on the Internet, in cooperationwith the Schlumberger International Net-work. He specifies the future vision of theMinistry of Oil and Minerals and that ofPEPA concerning the blocks of the south-ern and mid areas of the Empty Quarter.Al-Gawsi also stresses the fact that underthe leadership of Minister of Oil and Min-erals Dr. Rasheed S. Baraba, the valuableand important oil sector in Yemen isindeed in safe and loyal hands.

What is the latest news about

oil explorations in the Masila andShabwa basins?

Allow me to first start with the 2003commercial oil explorations in Damisblock S1, by Vintage Petroleum Yemen,and in Sharq Al-Hajar block 51, by Cana-dian Nexen Petroleum Limited. In thisrespect, I would like to inform you thatthe accumulation of scientific data gath-ered, and its analysis, has indeed partici-pated greatly in bringing new visions thatproved to be successful in the latestexploration activities, which have conse-quently resulted in greater interest from

international oil companiesin investing in Yemen.

The discovery of oil incommercial quantities inblock 51, operated byCanadian Nexen PetroleumLimited, is a good example.It is worthwhile to mentionthat construction work onthe central processing facil-ities [CPF], including the22-kilometer pipeline toconnect the Al-Masila Al-Shihr main pipeline, is cur-rently ongoing. The officialinauguration of production

in this area will take place in 2005, with aninitial production capacity of 20,000 to25,000 barrels per day. We are currentlyassessing the petroleum-production capa-bilities of the Basheer Al-Khair fields.

As for the oil discovered in blockS1, operated by Vintage PetroleumYemen, commercially announced onOctober 14, 2003, work is ongoing toconstruct its CPF, which will have acapacity of 10,000 barrels per day. Fur-thermore, a 28-kilometer pipeline, eightinches in diameter and with a maximumcapacity of 80,000 barrels per day, will beconnected to Hunt Oil Company’s Jan-nah block 5 pipeline in preparation forproduction. On the other hand, recently,a certain quantity of oil produced in

block S1 was transported to Jannahblock 5, signaling the expected produc-tion of the block by the first quarter of2005 with a capacity of 25,000 barrels perday.

As for oil explorations under inspec-tion for block 9, operated by CalvalleyPetroleum Incorporation, and block S2,operated by Preussag Energy GMBH, Iwould like to note that block 9 of Calvalleyis undergoing explorations in three stages.Work started with inspecting the first well,Ruwaidhat 1, and the initial results were614 barrels per day. Work will continue byinspecting wells that were drilled in 2003.An assessment program will also be imple-mented in the form of drilling new wellsto identify the extensions of the layerswith oil and gas, in preparation toannounce the commercial discovery of oilin this block.

As for block S2, I am glad to say thatthe German company Preussag EnergyGMBH was able to discover a well, Nilm 1,in this block, and initial tests have shownthe successful production of 450 barrelsper day. This is beside the oil well Kharwa1, discovered before with a productioncapacity of 500 barrels per day. Theassessment and development work plan

will also be studied for this block by theGerman company, in preparation toannounce the commercial discovery of oilin this block.

New discoveriesHave there been any new oil dis-

coveries that you can highlight?There have been initial discoveries of

oil in block 49, east of Shabwa, operatedby MOL Yemen Oil and Gas Company;along with block 43, south Hawareem,operated by DNO, ASA Yemen. Further-more, information obtained by analysis ofwell recordings has unveiled layers of oilin a well south of Behark in block 49. Testprocedures for the well have alreadystarted and unveiled the existence of oil in


three secondary layers. Later, the produc-tion capacity of these layers will be identi-fied after the completion of the testingoperation and assessments currently tak-ing place at the well.

There have also been positive resultsfor Al-Nabraga well at block 43 in Al-Masila. The results of drilling here re-vealed significant oil indicators, and wellrecordings have confirmed the existenceof a 13-meter-thick section of the Qishnlayer saturated with oil. This is apart froma section in the Al-Harshiyat layer. In fact,the Al-Nabraga well was recently examinedand results revealed an oil-production rateof 2,670 barrels per day.

What about promising oil blocks?There are promising blocks that

indicate the existence of oil in them –including blocks 15, 47, and 48 – as hasbeen unveiled through explorationdrillings at those blocks. Meanwhile,component maps are currently beingassessed and new areas are being investi-gated in a more specific manner, tolocate potential oil fields for explorationin these areas, to begin after carrying outmore assessments.

The Ministry of Oil and Minerals rep-

resented by PEPA has re-divided the areaincluding blocks S1 and 51 into six newblocks as follows: three blocks weredivided in block 51, and those are 71, 72,and 73; two blocks were divided in blockS1, and those are 70 and 69; and oneblock was formed from block 48, and thatis block 74.

A modern campaigning planYou have launched an interna-

tional bid tender for exploration ofgas and oil in Yemen. What are thespecifications and objectives of thisinitiative?

Upon instructions from Minister ofOil and Minerals Dr. Rasheed S. Baraba,the ministry, represented by PEPA, starteda modern international campaigning planto market the blocks that have been re-divided in blocks 51 and S1. These blocks– namely 69, 70, 71, 72, 73, and 74 – havebeen announced in local, regional, andspecialized international newspapers andhave received the greatest of interest byseveral international oil companies. Wehave done this to attract internationalinvestment in oil blocks in the countryand to open a new window to petroleum

investments for the most prestigious oilcompanies in the world, which, ifselected, could have their investments inYemen.

This plan has specified the means toprovide bids along with the major condi-tions for tender offers. Those offers wereprovided from January to March 2004,after which the companies that qualified –financially and technically – were allowedto participate in the tender. This alsocomes as an implementation of ordersfrom President Ali Abdullah Saleh, whohas always given great attention to the oil-production sector and its overall develop-ment in Yemen.

The tender has gone through sev-eral stages as follows: A committee wasformed by the minister of oil and miner-als to be under his direct supervision.Then the announcement to open the wayfor bids was published in major Yemeninewspapers and magazines – YemenTimes, Yemen Observer, 26 September,and Oil and Minerals magazine – andinternational newspapers – London-based Al-Hayat, UAE’s Al-Ittihad, Up-stream, and MEES. The announcementwas intended to allow companies to offer


their bids to invest in the six new blocks.The announcement was also publishedon the Internet.

The announcement mentioned thefollowing conditions to accepting bids byoil companies willing to operate the men-tioned six blocks: the company’s profile,the company’s technical and financialreports for the last two years, and thecompany’s latest audit report. The finaldeadline to receive bids by the oil compa-nies was March 15, 2004.

An operation room was prepared towork around the clock to receive the bidsof the applying companies and answer anyof their inquiries. A special data room wasalso prepared, and was equipped with themost highly developed and modernequipment. The period from March 27 toApril 28, 2004, was specified to study andinspect the provided bids and identify theones that qualified.

Twenty-eight international compa-nies from 15 countries applied for the ten-der, but not all of them were allowed. Let-ters were sent to companies that did notfulfill the requirements and they wererequested to complete their files by thedeadline specified.

After the completion of all requireddata and statistics of the applying compa-nies, the companies were evaluated usingthe most modern statistical proceduresand taking into account the internationalstandards applied in the field of oil indus-tries. Upon the completion of the evalua-tion of the applying companies, 19 oilcompanies from 12 countries qualified forthe tender. Nine companies were rejectedfrom the tender for either not fulfilling theconditions mentioned in the originalannouncement or not meeting satisfactoryfinancial or technical requirements neces-sary to apply.

After the Minister of Oil and Mineralsapproved the results of the first phase,which ended on March 26, 2004, letterswere sent to qualified companies to viewthe data collected by the data room duringthe period March 27 to April 28, 2004. Thethird phase took place between May 2 andMay 23, 2004. The final day to receive finalbids by the qualified companies was May

23, 2004. All bids were submitted in theform of envelopes sealed with red wax. Allbids were analyzed with scrutiny and stud-ied by the negotiating team, and thenraised to the minister.

This whole operation was the first ofits kind by the Ministry of Oil and Minerals,and it represents the degree of trans-parency expected in international bid ten-ders. Due to this step, the ministry receivedseveral requests to negotiate investmentopportunities to explore oil from interna-tional and Gulf-based companies thatwanted to operate blocks that are not yetdeclared. For example, some have appliedto operate blocks 6, 7, 3, and 17. Twenty-nine companies have applied for the exclu-sive rights to explore oil and gas in the sixannounced blocks, and this is a mere exam-ple of the transparency and accuracy of thesteps taken by PEPA to this extent.

This has also been made possible dueto the many oil discoveries in blocks 51and S1, and initial oil discoveries in blocksS2, 49, 43, and 9, which were unleashed in2003 and 2004. Such positive outcomesresulted from the joint efforts of PEPA andoil companies currently operating inYemen, amid direct supervision and fol-low-up by Minister Baraba. This was also

possible through direct campaigning onthe Internet.

What are your activities to pro-mote blocks 16, 19, 28, and 55?

Apart from what the ministry andPEPA are doing in promotion, PEPA, incooperation with Schlumberger Interna-tional, is campaigning for the open blocksin land and water 16, 19, 28, and 55 on theInternet, through a Web site of PEPA’sIndigoPool.com. Launching a Web site forPEPA on the network itself has manyadvantages, including opening a petro-leum window to Yemen; receiving thelargest volume of information related tothe oil industry in the international marketquickly, smoothly, and efficiently; idealpromotion through a common databasesupported by advertising and modern anddeveloped scientific approaches; bringingmore investing oil companies and visitorsto the database to know more about theoil industry in Yemen, fields of investment,and open blocks; and the ease of promot-ing and conveying available information.

A Strategic ProjectWhat is the future vision of the

ministry and PEPA concerning theEmpty Quarter and Middle Region?

The ministry and PEPA will continuea similar approach in future plans, espe-cially after the success of the first phase inpromoting open blocks. The secondphase will be the promotion for theEmpty Quarter and Middle Region. Thereis already a comprehensive strategic pro-ject prepared by the exploration depart-ment of PEPA based on instructions fromthe minister of oil and minerals. The pro-ject was prepared based on a scientificexplorative vision that was well re-searched and based on specialized andavailable information.

The ministry, represented by PEPA,is adopting ambitious plans throughwhich we hope to achieve all our pro-grams and future plans, especially afterthe great success achieved by PEPA in thelast few years in the field of explorations,and PEPA’s attraction of several interna-tional oil companies through its eventsand promotional activities.•


We have done this to attract

international investment in oil blocks in the

country and to open a new window to petroleum

investments for the most prestigious oil

companies in the world.

YEMEN

EDITORS’ NOTE Jean-FrançoisDaganaud joined Yemen LNGCompany as general managerin 1993. An engineering andbusiness school graduate, hebegan his career with ElfAquitaine in 1974, working inthe company’s exploration andproduction division in France,Iraq, Gabon, Yemen, and Con-go. He also served as the com-pany’s country manager forYemen and Congo, and asmanaging director of ElfPetroleum Azerbaijan. Following theTotalFina and Elf Aquitaine merger, hebecame vice president of business devel-opment for Asia in the gas and powerdivision.

Yemen LNG intends to market 6.2 MTPA[million tons per annum] of LNG [liquefiednatural gas] from its future plant in Yemen,with the first LNG deliveries beginning in2008. The project is programmed to launchas soon as an “anchor buyer” is secured,since all engineering studies have alreadybeen performed. The company is nowprospecting actively in the new, emerging

LNG markets: Korea, China,India, and the United States,while remaining open to oppor-tunities that can be seized else-where. The shareholders ofYemen LNG are France’s TotalS.A., with 42.9 percent; thestate-owned Yemen Gas Com-pany [YGC] with 23.1 percent;the U.S. independent, Hunt,with 18 percent; and Korea’s SKCorporation and Hyundai Cor-poration with 10 and 6 percent,respectively. Additionally, Hunt

and SK are partners in the Marib fields,from which the gas will be extracted, andwhere Hunt is joint operator.

Yemen LNG with an investment –excluding ships – in excess of $2 billion, isthe largest projected investor in Yemen.Not only is it active in the government’sdevelopment policy, but the company willalso shape the future and will certainlyprovide positive spillover effects for thegeneral Yemeni community and industry.For all gas-producing countries, the lique-faction of gas for export is the best way tovalorize big gas resources where there isno gas market in the vicinity.

A Well-Defined ProjectThe well-defined Yemen LNG project isintegrated from upstream to downstream:from gas production to LNG export activi-ties. Gas reserves of the Marib area fieldsare sufficient to produce 6.2 MTPA of LNGover more than 25 years. Gas productionand processing facilities are already inplace. Gas is produced along with oilthrough 360 active wells. Produced gas iscollected and treated through two maingas-processing centers to extract LPG [liq-uefied petroleum gas] for Yemen GasCompany, and the resulting dry gas is re-injected into the reservoirs. The gas will bebrought from Marib fields through a 320-kilometer pipeline to the liquefaction plantto be located at Bal-Haf, along the coast,100 miles west of Mukalla. The sharehold-ers are looking for a reliable LNG plantusing proven technology. The LNG plant tobe built and operated by Yemen LNG willbe designed with two trains and a totalLNG production capacity of 6.2 MTPA. Atwo-tank storage facility and a dedicatedterminal with customary harbor serviceswould be built near the LNG plant. The ter-minal has been carefully planned in anexceptional site that does not raise envi-

ronmental concerns, and producesthe lowest impact on the coastline andgeotechnical risks possible, as well asthe lowest downtime due to winds.The terminal also receives natural pro-tection against the main eastern wavesof the winter monsoons and has adeep harbor. With access to existingproduction facilities and to an excep-tional port site, Yemen LNG thus ben-efits from competitive technicaladvantages.

Sustainable Development andEnvironmental ProtectionYemen has a historic civilization anda landscape unique in its richness.As such, Yemen LNG was careful inselecting its pipeline routes andplant and terminal locations so asnot to negatively alter Yemen’s trea-


Jean-François Daganaud

By Jean-François Daganaud, General Manager, Yemen LNG Company, Sana’a

Yemen LNG’s Project for a New Era

A computer-generated image of Yemen’s future LNGplant

sures. Yemen LNG has already completedits Impact On Public [IOP] and Environ-mental Impact Assessment [EIA] studies.When fully operational, the project willprovide jobs for about 500 employees.Specific training programs will be set upto ensure the transfer of the necessaryskills to Yemenis so that their participa-tion in the project is maximized withoutcompromising quality and standards,thus providing long-term developmentfor the population. The program willhave specified objectives and its progresswill be reviewed annually. Living facilitieswill be constructed at the plant site, withcommunication linksto main city centers inYemen. The plant willrequest many techni-cal and support ser-vices where Yemenicompanies will haveto play their role, thuscontributing to thedevelopment of localindustry.

Marketing in theSpotlight AgainAfter the Asian crisis,with markets returningto the growth path,marketing activities areentering a new era andare focused on core

markets where Yemen LNG believes it hasspecific advantages: Korea, United States,India, and China. Yemen’s geographicallocation – near India and half way betweenFar East Asia and Europe – makes it apotential competitive producer in any mar-ket. Furthermore, the specifications of itsLNG make it acceptable to almost any mar-ket. The participation of the Korean com-panies SK and Hyundai in Yemen LNG asshareholders will make it easier to enterthe Korean market, which is now expand-ing. India is on the verge of rapidly devel-oping its LNG market, and the geographi-cal proximity of Yemen gives us an advan-

tage to reach that difficult market. Chinahas huge needs for energy as well, and hasjust started dealing with LNG. However,the biggest change in the LNG market willcome from the United States, where gasproduction is expected to decline soon, atthe same time that gas consumption isgrowing. The U.S. demand for LNG isbecoming so huge that it is draining LNGsuppliers almost everywhere in the world.Although Yemen LNG has yet to find LNGbuyers and is facing tough competitionfrom other projects in the world, thechances to launch the project are increas-ing every day.•


When fully

operational, the

project will provide

jobs for about 500

employees.

YEMEN

IT IS AN HONOR FOR ME TOinvite you to invest in buildingnew petrochemical-industriesunits (agriculture fertilizers anddetergents) for domestic con-sumption and overseas export.Yemen Oil Refining Company(YORC) will facilitate all yourneeds in a professional mannerfor the benefit of all.

Yemen is more accessibletoday than it has ever been. Thecountry has qualified personnel,modern air traffic, and encour-aging investment laws. The strategic loca-tion of Yemen on the Red Sea, the ArabianSea, and the Gulf of Aden makes thecountry an excellent transshipment basefor routes east to west and north to south.

Any facilities that are established inaccordance with ambitious and accuratestrategies and plans, realizing their targets,are able to move rapidly, overcoming theobstacles they may confront. The same istrue when we talk about YORC, which, in ashort period of time, has been able tostand on a firm base with a strong will,interpreting the political views and per-spective of the Yemen integrator and theleader of the development process, Presi-dent Ali Abdullah Saleh, to achieve therequired development for the country.

Hence, YORC looks forward to estab-lishing its future status by offering devel-opment in the oil industry, expanding itscurrent facilities, and managing and oper-ating the company in such a way that pro-duction may be raised to 25,000 barrelsper day.

Yemen Oil Refining Company has setvarious goals following feasibility studiesof the petrochemical industries, identify-ing the most significant domestic needs.Top of the future plans are developing therefineries and multiplying production.Meanwhile, YORC encourages and sup-ports investment in the field of petro-chemical industries – particularly in smallprojects – due to the availability of rawmaterials for such industries.

Regarding refinery expansion, thefeasibility studies on the Marib Refineryhave been completed. We are now look-

ing for new investors to fi-nance this project. Regardinginvestment in the field ofpetrochemical industries, thecompany has conducted pri-mary feasibility studies forsome projects. These studiesconcluded that establishingsuch projects would produceprofits for investors and thenational economy.

Yemen Oil Refining Com-pany was established as anindependent economic unit

and affiliate of the GYCOG, according tothe Republican Resolution No. 46 dated1996. The Republican Resolution No. 311was issued for the appointment of the

general director of the company.The business framework of the com-

pany is as follows:� Operating the Marib Refinery since

its handover from the Yemen Hunt OilCompany in December 1998

� Developing the refinery and thecompany’s business

� Importing and exporting petroleumproducts as required

� Expanding the existing refiningunits and building new units wheneverapplicable

� Supervising and controlling market-ing and related activities in conformity

with applicable specifications in theRepublic of Yemen

� Implementing policies and marketplans directed to meet the demand for oilproducts

� Conducting studies and research inthe field of oil refining

� Executing a number of small projectsin the field of petrochemical industries

� Developing the company’s staff’sskills in various specialty areas

� Developing and implementingsafety rules and regulations at the refiningunits operating in the Republic of Yemen

� Carrying out other tasks required inaccordance with company’s business strat-egy, the company charter, and the applica-ble law, resolutions, and regulations

The future plansof the company in-clude the following:

� Standardizingthe refining policy inYemen under a singleauthority after the es-tablishment of thenew refineries

� Carrying out apromotional cam-paign for the projectsof modernization andexpansion of theAden and Maribrefineries

� Following upon the execution ofnew refining projects,and promoting in-

vestment in petrochemical projects� Searching for further potential

resources to increase the company’sincome

� Working to improve the petroleumproducts’ specifications in order to com-ply with new developments in the field

� Establishing a database containingdata, information, and studies relating tothe refining and petrochemical industries,which is necessary to oil companies oper-ating in Yemen

� Participating in and encouragingthe organization of economic and scien-tific conferences and seminars focusing on

90 LEADERS VOLUME 28, NUMBER 390 LEADERS VOLUME 28, NUMBER 3POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC.

Musad A. Al Subari

By Musad A. Al-Subari, Executive General Manager, Yemen Oil Refining Company (YORC), Sana’a

A World of Petrochemicals

the refining industry, whose objective is topromote investment in the field

� Studying fertilizer-industry projects� Studying detergent-industry projects� Studying and carrying out expan-

sion and modernization of the MaribRefinery laboratory

Investment opportunities at theexisting refineries include modernizingthe Aden Refinery and expanding andmodernizing the Marib Refinery in orderto achieve a production capacity of 25,000barrels per day. In addition, the Rass IssaRefinery was established by PresidentialDecree No. 59 in 2003, signed by the Min-istry of Oil and Minerals and the HoodPetroleum Company. The expected capac-ity of this refinery is 45,000 barrels perday.

Similarly, the 2002 PresidentialDecree No. 38, signed by the Ministry of Oiland Minerals and the Hadhramout RefineryCompany, establishedthe Al-Dhaba Refineryproject (Governorateof Hadhramout). Thefoundation stone ofthis refinery was laidby His Excellency Pres-ident Ali AbdullahSaleh. The refinery’sprospective capacity isabout 50,000 barrelsper day.

Two of the goalsof Yemen’s refining policy are to completeinvestment circles in the field of oil andgas, which have proved to be fruitful, andto meet the demand for oil derivatives.Other investment opportunities may befound elsewhere in the petrochemicalindustries – for example, in the establish-ment of the hydrogen-cracking plant atthe Aden Refinery and the developmentof the fertilizer and detergent industries.

The FertilizerIndustry in general represents one of themost important resources for thenational economy. Some projectsdepend on using refinery products asraw materials. Because of Yemen’s agri-cultural nature, YORC began a prelimi-

nary study for projects in the fertilizerindustry. Through a survey of all gover-norates, and information from the con-cerned authorities, it was found thatYemen imports a great deal of fertilizersfrom neighboring or other countries –more than 350,000 tons per year. Thegovernment’s plan to make agriculture ahigh priority, and the expectation of acontinually increasing demand for fertil-izers, led the company to think seriouslyabout producing these substanceslocally. This would save hard currencyand create work.

Moreover, investment in this field isbeneficial for several other reasons. Forinstance, the availability of raw materials,in addition to Yemen’s strategic location,makes it possible to export the product toneighboring countries in Africa, which areconsidered to be promising markets.Prime Minister Abdulkader Bagamal

issued Resolution No.134 in December2003 about this mat-ter. The resolutionestablished a commit-tee formed by mem-bers of the ministriesof oil, agriculture, andindustry. They willstudy fertilizer-indus-try projects and openinvestment in thisfield.

DetergentsThe construction of a linear alkyl benzeneplant aims to produce the petrochemicalintermediate linear alkyl benzene (LAB),which is used as the raw material in theproduction of many kinds of detergents.Many local factories use this material in

large quantities. Cur-rently, this material isimported from out-side the country byspending hard cur-rency. If it is manufac-tured in the local mar-ket, it will save moneyand support our localeconomy. Moreover,the raw materials forthe production of LABare available locally,wherever kerosene orgas oil is produced inlarge quantities – forinstance, at the AdenRefinery.•


Two of the goals of

Yemen’s refining policy are to complete

investment circles in the field of oil and gas, which

have proved to be fruitful, and to meet the

demand for oil derivatives.

Yemen’s Oil Refineries

Aden Refinery

� Situated in the city of Aden,approximately 360 kilometers to thesouth of Sana’a

� Current capacity is 90,000barrels per day

� Operation started in 1954� The refinery produces LPG, jet

fuel, gasoline, diesel, kerosene, fueloil, and asphalt

Marib Refinery

� Situated in a historic city in theMarib governorate, approximately 230kilometers to the northeast of Sana’a

� Current capacity is 10,000 bar-rels per day

� Operation started in 1986� The refinery produces light

naphtha, gasoline, diesel, and fuel oil

YEMEN

EDITORS’ NOTE Omar M. Al-Arhabi joined Yemen Petro-leum Company (YPC) in 1991and recently served as vicegeneral manager for commer-cial and financial affairs. Hepreviously served as financialdirector, purchasing director,and training director. A Ph.D.candidate in marketing, heholds a bachelor’s degree inbusiness management and anM.B.A. in marketing. He is cur-rently a board member ofYemen Commercial Bank and ArabInsurance Company.

How would you describe Yemen Pet-roleum Company’s role in Yemen’senergy sector?

Yemen Petroleum Company [YPC]has played a key role in Yemen’s energysector for more than 40 years. Some ofits roles have, since then, been graduallyreassigned to existing or newly estab-lished companies to give more definedroles to these units. After its establish-ment in 1961, YPC served as the exclu-sive importer and distributor ofpetroleum products within the Republicof Yemen. It was also the exclusive agentand distributor for lubricant products,and the exclusive importer and distribu-tor for liquefied petroleum gas[LPG] within the country.

Today, we have the YemenPetroleum Refinery Company,which supplies the YPC withthe petroleum products thatYPC, in turn, distributes. Wealso have the Yemen Gas Com-pany, which now handles allactivities relating to the distri-bution of LPG. As for lubricantproducts, YPC auctioned outthe agency rights to the private sector toencourage market activity.

Despite handing over the lubricantagency rights to the private sector, YPCstill plays a strategic role in preserving thebalance of the market. We maintain alarge stock of lubricants, from all brands,with quantities based on consumer prefer-

ences and consumption. Theseare held with the aim of pre-venting individual agents frommonopolizing the market, orin case there is a lack of supplyto the market. When that hap-pens, YPC will supply the mar-ket with the products indemand and allow for a pricebalance to remain, ensuringthat the end user is notharmed. In addition to thestrategic stock, YPC holds anactive stock that it sells regu-

larly as an active player in the lubricantsmarket.

With all this in mind, the primaryactivity remains petroleum marketingand distribution. YPC supplies the entiremarket demand for mogas, diesel, tur-bine, kerosene, and fuel oil within thecountry. However, to encourage and sup-

port private-sector participation, YPCgives qualified businesses agency rightsthat allow them to sell some of theseproducts with a commission. Airports aresupplied by YPC directly – with theexception of Aden International Airport,which is supplied by BP – as are themajority of the government and defensebodies.

How do you see YPC’s role inYemen evolving in coming years?

YPC is playing a very active role inthe development of Yemen, and we pro-ject this participation to grow more overthe years. We have made a great effort tobreak away from the historic binds thathave left the country’s infrastructure inarrears of its actual potential.

YPC is moving to address theseefforts on several fronts. To begin with,we are now focusing on recruiting tal-ented young executives to occupy thecompany’s management positions. We arelooking for educated and innovativebright minds that will refresh the imageand persona of the company. In addition,the company is opening its doors wide forthe Central Organization for Control andAudit to create a strong and vigilant sys-tem of checks and balances.

On another front, we are requiringthat fueling stations all over the republicimplement specific structural and design

specifications in their stationswhich would place the typicalYemeni gas station at the van-guard of international standards.

Everyone should know thatthe Yemen Petroleum Companyand Yemen, with its entire socialand industrial infrastructure, ismaking conscious and tremen-dous strides toward develop-ment. We are in touch with theleaders of today’s markets all

over the world, in all aspects of commerceand development, working with themtoward advancing our own markets andindustries to put us on the same level asmajor international-market players.

In what ways does YPC interact


Omar M. Al-Arhabi

An Interview with Omar M. Al-Arhabi, General Manager, Yemen Petroleum Company (YPC), Sana’a

The new Yemen Petroleum Company building

YPC’s Tremendous Strides

YPC

is playing a

very active role in the

development

of Yemen.


Reading through previous issues of LEADERS broughtme to a critical realization. An introductory commentby Henry Dormann addresses the misperception heldby many people across the world regarding the natureof large businesses (in all its ethical- and social-responsiveness aspects). Mr. Dormann states that thedishonest reputations of some [companies] eveninclude the companies’ leaders. I believe that this mis-perception grows with the growth of the company. Itis a part of human nature that we tend to pass judg-ment on what we are not able to grasp. And the

greater the success and growth of the company, thegreater the animosity that grows with it in those vigi-lant eyes in the public. This is a result of the publiccontention that such success can only come with thecorrupt and unethical means that have become adefining aspect of their understanding of corporateculture. I strongly believe that this perception is fedby the simple fact that they lack proper knowledgeand accurate facts that would reverse this natural ten-dency to attack and mistrust.

As the head of a Yemeni company with annual rev-enues of nearly $1 billion, I appreciate the bold state-

ment by Mr. Dormann, and I strongly support his callfor company leaders all over the world to face this real-ity and take active steps to better change this percep-tion. I agree with him that it is, in fact, up to each com-pany to do this, and that it is up to the CEO to initiateand actively participate in taking a leading role to makethis happen.

This can be done by encouraging increased levelsof transparency in the company’s activities, and initiat-ing public awareness programs (specific to the com-pany’s social environment) that would reflect the com-pany’s commitment to its social responsibilities andalso address its concern for its image in the public eye.By doing this, the company will earn the trust of itspublic. They will be well informed and gain a sense oftouch with the company. Furthermore, the companyshould hold the sense of a greater mission beingembarked upon with the initiation of these actions:that, as a part of the cyclic give-and-take social circle, itis playing the role that is imperative upon it as a mem-ber of the society that is feeding its success and growth.

Mr. Dormann concluded his message by asking forany ideas that might be helpful. I wish to thank him forhis message, for the opportunity to express my ideas. Iam sure that within the vast global corporate culture,great minds may feed others, putting us one step closerto improving ourselves with each interaction. And withLEADERS as the platform for this interaction, it inspiresits readers across the globe that they too can act as acatalyst for change towards a better global community.

Omar Mohammad Al-Arhabi, General Manager, Yemen Petroleum Company

with Yemeni and international energy companies?YPC’s interaction is limited in this regard. We supply

the needs of these companies, along with any other type ofcompany that requires fuel supplies in the republic.Whether they are an oil-exploration company, a contractingfirm, or any other type of company, they always need asource for their fueling needs, and that’s where we come in.

As far as oil and energy investment operations areconcerned, we do not typically do that because that isthe function of the Yemen Petroleum Investment Author-ity, which is another body that reports back to the minis-ter of petroleum and mineral resources. As I mentioned,the objective of having these multiple units under theMinistry of Oil and Minerals is to create more definedroles, to ensure greater effectiveness in the government’soperations.•

I appreciate the bold statement by Mr. Dormann,

and I strongly support his call for company leaders

all over the world to face this reality and take active

steps to better change this perception.

LETTER TO THE EDITORS

It is a part of human nature that

we tend to pass judgment on what

we are not able to grasp.

YEMEN

EDITORS’ NOTE Alistair Mooneyhas been with Canadian Nexen(formerly Canadian Occiden-tal) since 1977, and was theindividual who discovered thefirst well, called Sunah, for thecompany in Yemen. He was per-manently stationed in Yemen in1990, was appointed explo-ration manager in that countryin 1993, and, after working ondevelopment and productionprojects in the North Sea, Roma-nia, and the Middle East, wasappointed vice president responsible forall international exploration in 1999. Hewas appointed to the position of vice presi-dent, international operations, in 2004. Agraduate of the University of Calgary,Mooney is a member of the Association ofProfessional Engineers, Geologists, andGeophysicists of Alberta.

How would you describe Nexen’s his-tory in Yemen?

The Masila project in Yemen is aremarkable example of a successful long-term partnership. It is built on coopera-tion and collaboration among Nexen, theYemen government, and communitymembers, including those living close toour Masila operations. We established ourfirst Yemen office with an initial produc-tion sharing agreement [PSA] signed onMarch 15, 1987. The PSA covered a six-year, two-phase program of seismic anddrilling exploration in the 37,200-square-kilometer Masila block 14. Nexen is theoperator of the block, with a 52 percentworking interest.

On December 25, 1990, our first dis-covery well, Sunah-1, reached a depth of2,732 meters and found four meters of oil-bearing Kohlan sand, along with sixmeters of oil in the Qishn formation,where most of the oil reservoirs in theMasila area are located. Commercialitywas declared on December 18, 1991, withthe well’s first oil production celebratedby Yemen’s President Ali Abdullah Salehon September 23, 1993.

The strength of the project was ini-tially grounded in the Sunah, Heijah, and

Camaal fields, with peak pro-duction estimates of about120,000 barrels per day. Sincethen, proven reserves havemore than quadrupled, due tothe ongoing success of explo-ration activities, resulting in 17producing fields on Masilatoday. Production reached aplateau of 230,000 barrels perday over the period from 2001to 2003, and is expected tohave averaged 210,000 barrelsper day in 2004. Masila contin-

ues to be an efficient and economic oper-ation, with low production costs of about$1.95 per barrel in 2003.

The success of the Masila project wasa major contributor to the growth ofNexen’s overall company assets. Produc-tion and cash flow from the Masila projecthas increased every year since first oil pro-duction in 1993. Nexen found moreopportunities for oil development on theMasila block over the last 10 years. Nexenfound Yemen to be a very favorable loca-tion in which to invest for the develop-ment of oil production. Nexen, its part-ners Occidental Petroleum and Consoli-dated Contractors, the government ofYemen, the Ministry of Oil and MineralResources, the governate of the Hadhra-mout, and the local communities havebeen working together for the past 17years to maximize the value of the Masilaoilfield.

In what ways do you see Nexen’sactivities in Yemen evolving in thecoming years?

Oil production from the Masila fieldhas reached its maximum after 10 yearsof growth and plateau oil production.The challenge for Nexen in the future isto maximize the value of oil productionby reducing the cost of producing the oil.Initial reservoir depletion plans will maxi-mize and enhance oil recovery fromexisting fields. Nexen has explored newblocks in Yemen in the past, and willcontinue to explore new areas of thecountry when the opportunities arise.

Nexen will also continue to be in-volved in community-relations projects,

which help local communities initiate andsustain projects that benefit as many citi-zens as possible.

What has Nexen found mostchallenging about doing business inYemen?

Nexen has found Yemen a very fairplace to do business and has spent timeand effort developing business relation-ships with stakeholders in the country forthe benefit of the company and theRepublic of Yemen.

When Nexen first started oil explo-ration in 1987, the oil industry in Yemenwas in its infancy. Material and servicesrequired for exploration and early oil-fielddevelopment had to be sourced andimported into the country. Long lead-timeplanning was required to obtain theproper materials. Authorities within theYemeni government were most helpful infacilitating the speedy importation, cus-toms clearance, and transportation toallow exploration and development totake place. Now Yemen has many skilledcompanies that provide oil-field services.Initially, the workforce was not skilled inoil-field jobs; now over 75 percent ofNexen’s workforce is Yemeni.

Presently, our greatest challenge is tomaintain oil-field production at high lev-els. The Masila block is the largest oil-pro-ducing project in Yemen, accounting formore than half of the country’s total oilproduction. Oil makes up approximately70 percent of the country’s revenue.

Nexen has found the stability of theproduction sharing agreement, signed in1987, most beneficial to doing business andinvesting in future opportunities on theMasila block. The terms of our agreementwith the Yemeni government have notchanged since its initial signature, and therehave been limited additions of taxes or tar-iffs. This has enabled Nexen to plan its capi-tal investments with confidence in the ex-pected returns. In other oil-and-gas jurisdic-tions, taxes and other levies are imposed onoil companies after discoveries.

The long-lasting business relation-ships with the Yemeni government andpeople have been very satisfying forNexen and its employees.•


Alistair J. Mooney

An Interview with Alistair J. Mooney, President and General Manager, Canadian Nexen Petroleum Yemen, Sana’a

A Remarkable Long-Term Partnership


YEMEN

THE MINISTRY OF TELECOM-munications and InformationTechnology is the regulatorybody of the telecommunica-tions and information sector inthe Republic of Yemen. It isresponsible for drawing upstrategic policies to develop thetelecommunications and infor-mation sector and to organizeits structural management. Italso directly supervises all tele-com operators in the field oftelecommunications, informa-tion, and postal services. The ministry isthe body authorized to deal directly withlong- and short-term telecom develop-ment plans.

Public Telecommunication Corporation The Public Telecommunication Corpora-tion (PTC) was founded in 1990 upon themerger of the Public Communication Cor-poration, based in Sana’a, and the YemenTelecommunication Corporation, based inAden. The PTC is responsible for the man-agement, supervision, and execution of alltelecommunications services and projectscoming under the umbrella of the Min-istry of Telecommunications and Informa-tion Technology.

Since its establishment, the PTC hascontinued to lead significant developmentprojects in the telecommunications sec-tor. These projects reflect the strategiesand policies of the Yemeni governmentand the social need.

The PTC has achieved high annualprofits in recent years, and it is consideredone of the resources that support thenational economy and the governmenttreasury. The equipped switching capacityin 1990 was 153,866 lines. By 2000, 460,736lines had been completed. By the thirdquarter of 2004, the PTC had reached atotal capacity of 1.1 million lines.

In its initial stages, the PTC used ana-log-radio rural telecom systems from theItalian company ITALTEL and the Americancompany SRT Communications, which areboth powered by solar-energy systems. Inthe last few years, the Yemeni governmenthas obtained a Japanese assistance pro-

gram for developing telecom inYemen’s rural areas. Throughthat program, a digital-radiorural telecom system, usingTDMA (time division multipleaccess) technology from NEC,was installed. This assistanceprogram is still ongoing today.

The PTC introduced DLC(digital loop carrier) systems byusing cabinets as access systemson the optical-fiber cableroutes. One such cabinet iscalled UMC1000, manufactured

by an American company named AdvancedFiber Communications, and the other iscalled HONET, manufactured by a Chinesecompany named Huawei. In addition, fixedwireless local loop systems were installed.Some of them were using DECT technologyfrom the German company Siemens andthe Greek company Intracom, while othersused CDMA (code division multiple access)technology from two American companies,Motorola and L-3 Communications.

Approximately 75 percent of theYemeni population is settled in rural areas.The coverage rate is remarkably low inthese areas, due to the mountainous ter-rain, lack of public electricity, and high costof connecting the service to these areas. Inspite of these constraints, the revenuefrom rural lines is higher than the revenuefrom PSTN (public switched telephone net-work) fixed lines, due to continuous highusage by people living in rural areas. By thethird quarter of 2004, the number of ruraltelephone lines reached 108,741.

Information and CommunicationTechnology CityInformation and technology have im-posed on the world one language thatmakes it seem like one small village, with-out boundaries or obstacles. Since 1969, anumber of countries have established“technology towns.” These towns attracttalent in all fields of technology, providingthose people with opportunities to createa quality transformation. This could havean impact on the progress of these coun-tries, by founding a solid base for researchand technological development, stimulat-

ing private investments in informationtechnology, and encouraging moderntechnologies in governmental institutions.

Building up manpower is the initialand most important step in the march ofprogress. In this regard, the idea emergedto establish a communications and tech-nology town in Yemen, built upon modernfoundations. The prime minister’s CouncilResolution No. 4 in 2002 formed the basisfor transforming this dream into reality.

What does “technology town” actuallymean? The expression describes an inte-grated technical complex concerned withthe communications, technology, and pro-gramming industries, attracting specialistsin all fields and helping them to transformtheir creative ideas into production witheconomic benefits. The complex is formedby a number of centers and specializedcompanies working in the field of informa-tion and communications technologiesand in the programming industry.

Objectives of the Technology Town� To provide an appropriate premise

for public, private, and mixed sectors andto include specialized training centers forthe development of programming, its ap-plication, the collection of data, and themarketing of computer apparatuses

� To develop a type of integrationthrough the pursuit of different activitiesin one location, facilitating the acquisitionof information for change through com-mittees and institutions

� To get information to academics –students and researchers – quickly andaccurately

� To encourage the private sector toinvest in the specialized institutions ofcommunication, information, and pro-gramming technologies

� To raise the standard of awarenessin the community, introducing the publicto the concepts of technology and en-couraging talented young people to estab-lish their own creative projects by grant-ing them use of the facilities available inthe town

� To lay down principles, measure-ments, and standards concerning commu-nication and information technologies

By the Honorable Eng. Abdulmalek Almualemi, Minister of Telecommunications and Information Technology

Communicating with the World

Hon. Abdulmalek Almualemi

� To encourage people to purchaseand use computers, and train them ontheir uses

Components of the TownThe first stage consisted of five months ofcontinuous work to achieve the founda-tions of the current buildings. This wasmeant to prepare our country for its move-ment into a digital epoch, and to establisha generation of people armed with aware-ness and a basis for establishing nationalcompanies with a high degree of efficiencyand high-tech capability. Thetotal cost of the first stagereached 2.2 billion Yemen riyals($12.3 million) and it was inau-gurated by the president of therepublic on June 6, 2002.

This initial stage includedthe following components:

� The General Institute forCommunications

� Outcomes communica-tions network

� Yemen Internet� Industry center and pro-

gramming development� Internet café� E-mail library

Internet ServiceIn early 2002, the PublicTelecommunication Corpora-tion prepared the Yemeni gate to provideInternet access. The equipment wasinstalled in five cities: Sana’a, Aden, Ta’izz,Al-Hodeidah, and Al-Mukalla. Thisincluded 12 sites that provide services for30,000 members. Internet service is pro-vided through a dial-up system or leasedlines.

The technical characteristics of theYemeni gate are as follows:

� 64 Kbps to 2Mbps� Connection to the World Wide Web

two ways, via satellite or fiber-optic cables� Capacity for 65,000 users, which is

expandable to 160,000� The possibility of providing more

than 16 service providers with high-speedconnections all over the country

� Reaching the service providers’servers through the information network(Network Data)

� Providing connection for inter-national channels of more than 100megabytes

The world changes rapidly as far astelecommunication technology is con-cerned. Due to these changes, Yemen haswitnessed a remarkable increase in com-puter and Internet use. The rate of sub-scription to the Internet in Yemen reached3.15 for every 10,000 people in 2000. Inmid-2002, during the preparation of theYemeni Internet gate, the rate of interna-tional subscribers reached 0.2 percent.The number of computers was 36,000, orone computer for every 500 people. ThePTC started introducing high-speed Inter-

net service in December 2004. This servicehas an initial capacity of 11,000 sub-scribers, and can be expanded accordingto demand. This service exists in the majorcities, such as Sana’a, Aden, Ta’izz, Al-Hodeidah, Ibb, Al-Mukalla, and Seyoun.

Yemen MobileYemen Mobile has become one of the mostfruitful projects of the PTC because of itsloyal, experienced employees. The Yemenipublic regards the PTC as a gateway con-nected to the world with modernized tech-

nology. It is copying the accelerated devel-opment in the field of telecommunicationsand information technology, aiming tomake a remarkable leap in Yemeni society.

Due to all these changes, the PTChas inaugurated the Yemen Mobile ser-vice, which is a government entity run bylocally qualified employees. The cost ofthe mobile service coincides with the pur-chasing ability of Yemeni citizens and,using high technology, it can cover a largepart of the country.

At this stage, all major cities, mosttowns, and the main routes between themhave been covered by installing a hugenumber of base transceiver stations. Thisrepresents 70 percent of the populatedagglomerations, including Yemen’s ruralareas. The PTC is aiming to increase thecoverage area to 90 percent of the wholepopulated area, including islands such asSocatra Island.

The goals of Yemen Mobile are:� To facilitate the Yemeni citizen to

get acquainted with the latest technologyin the telecommunications field

� To support the purchasing powerof the different levels of society and pro-vide them with services that can assurethe maximum utilization of the mobileservice by the public

� To create new employment oppor-tunities for young people and graduate stu-dents from colleges and universities

Advantages of Yemen Mobile’s System� Technical advantages: Yemen

Mobile’s system uses CDMA technology,which is considered a third-generationsystem and currently supports a speed of153 Kbps.

� Health advantages: The power con-sumption of the CDMA handsets reachesaround 200 megawatts, which is less thanother systems using high wavelengths thatmight affect the user’s health.

� Social advantages: The system pro-vides full security for calls, as it uses acoded system that can give each call itsown wavelength and bar any call from for-

eign interception.� Other advantages:

Yemen Mobile enjoys full flexi-bility and can be upgraded tohigher levels through the addi-tion of simple software. YemenMobile offers high purificationin voice and data services.Yemen Mobile can easily be in-terconnected with other sys-tems and related internationalstandard protocols.

Services Provided by YemenMobileBesides the normal supplemen-tary services provided by anymobile operator, such as SMS (short message service)and VMS (voicemail service),Yemen Mobile’s network pro-

vides the following attractive services:� Push to talk (PTT): Through the

mobile system, users can enjoy a walkie-talkie service. This service can be utilizedby car companies, tourist companies, hos-pital ambulances, etc.

� Internet access: This service is thefirst service in Yemen that allows users toaccess the Internet backbone usingYemen Mobile handsets as a modem, witha speed reach of 153 Kbps.

� Fax service: The handsets supportfax modems and can be used to send orreceive faxes via Yemen Mobile’s net-work. Handsets that don’t support thisfunction can be used as modems, and canbe connected to a PC to send and receivefaxes.

� The family-number service: Thisservice allows subscribers to make theircalls with lower tariffs by using shortnumbers.

� Multimedia service (MMS): This ser-vice allows Yemen Mobile subscribers tosend and receive color pictures, shortclips, rings, and e-mails.

� Wireless application profile (WAP)services: In the near future, this servicewill be available to allow subscribers tobrowse Web sites that support WAP ser-vices using the handset itself.

� Virtual private network (VPN): Thisservice provides the possibility of formingwork group(s) and allowing some autho-rized individuals to send or receive callsfrom outside the group(s). Calls withinthe same group have lower tariffs.•


The Ministry of Telecommunications’ main office

yemen’s tourism wealth - leaders magazinethe higher council of tourism approved in january the...

Documents