Oil Ministry signs agreement with Occidental Petroleum

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Oil Ministry signs agreement with Occidental Petroleum

Post by RAZOR on Tue Apr 10, 2007 2:03 am

Oil Ministry signs agreement with Occidental Petroleum



Occidental VP Donald Lipinski and Minister of Oil Khalid Bahah (2nd and 3rd from R) sign an agreement to work together. The Ministry of Oil and Minerals signed an agreement with Occidental Petroleum to participate in the oil production in Sector 75 in Shabwah governorate. The signing of the agreement was attended by Khalid Mahfuz Bahah, Minister of Oil and Minerals; Donald M. Lipinski, Vice-President and General Manager of Occidental; Professor Ahmed Abdel-Qader, Manager of the Public Oil institution; and other representatives from the Ministry of Oil.

After the signing, Bahah announced to the media that the Occidental Company is one of the partners in oil exploration in Yemen. “This is the first discovery for Occidental Company in sector No.14 along with Canadian Nexen Company,” he said. “The signing of the agreement is for the exploratory sector No. 75, which is within six sectors. Also, there are eight sectors that will be signed between April and July.”

In an interview to Yemen Observer, Bahah said that the sector will be productive in the near future, and this sector will increase oil productivity in Yemen. Donald M. Lipinski, Vice President and General Manager of Occidental said, “The company has prepared studies for the work in this sector, and all findings will bring a brighter future to Yemen. All the talk about the absence of oil in Yemen will be mere rumors in the near future and will have no basis. The company will undertake a survey before initiating the work, which will begin in 2008.”

Lipinski expressed his happiness at the signing and said that the company has been operating in Yemen since 1987 and will continue to work here. “The company will pay one million dollars as a grant, 5 percent of which will be the share of the public institution of oil and gas,” said Abdul-Malik Allamh, Undersecretary of the Ministry of Oil and Minerals. “It will be the amount of investment, which will consist of two phases, first investigation and second the exact amount costing $12.5 million dollars.”

Allamh said that the state’s share of production will be 64 percent for the first period and will increase to 80 percent in the second period. Dr. Tawfiq Noaman, advisor to the minister of oil and minerals said, “The stages of the agreement have a number of obstacles that we have to overcome. It began with the announcement of the auction followed by the winning bid by Occidental. After signing the agreement, it will become officially documented then submitted to the House of Representatives for approval,” he said.

“The most controversial point in the agreement is the cost of recovery from the Ministry of Oil. There are many other areas to look into, but the cost of recovery was the main issue. At the end, it was agreed that the cost will be recovered after the oil census,” said Noaman.

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