Yemen awards eight oil blocks to five foreign exploration firms

Dec 9, 2006, 13:30 GMT

Sana'a - Yemen awarded five foreign oil companies on Saturday the concession rights to explore in eight onshore blocks in the country's third international oil licensing round.

Yemen's Oil and Minerals Minister Khaled Mahfoudh Bahah told a news conference that five successful bidders would explore for oil and gas in a total area of 6,160 square kilometres in six provinces in east-southern the country.

He said Austria's OMV picked up block 29 in al-Mahra province near the border with Oman. Norway's DNO was awarded block 84 in Hadhramout province.

Both OMV and DNO are already operating in Yemen

UK's Burrn Energy was granted block 17 near the southern port city of Aden. This is the first exploration activity in that area.

Two Asian oil companies were among the winners to be the first Asian oil firms to explore in Yemen.

The Indonesian PT Medco Energi International won blocks 82 and 83 near an oil producing field operated by Canada's Nexen in the south-eastern Hadhramout province.

India's oil giant GSPC was awarded block 19 in the northern al-Jawf province and blocks 28 and 57 in the south-eastern province of Shabwa.

'This is a new trend for having Asian companies to be involved in exploration in Yemen,' the Yemeni minister said.

Bahah said the winner companies would invest a sum of 99,050,00 dollars in the first phase of exploration in the eight blocks. He did not give time limits.

He said the companies were expected to commence exploration work by March 2007.

Yemen, small non-OPEC oil producer, is pumping 360,000 bpd of crude oil, down from around 470,000 bpd in 2002 due to declining output at mature fields.

Yemen's economy is highly dependent on oil production, with the country's oil exports accounting for 70 per cent of government revenues.

Yemeni oil production is heavily reliant on foreign companies, with more that 20 foreign firms operating concessions. The country is divided into 87 blocks, of which 12 already produce oil.