"We have a plan to expand our refinery capacity in Yemen, and not just for local consumption. I think we are welcoming all the companies that would like to erect and operate refineries in Yemen for internal consumption or export refined products."
Like many Middle Eastern countries, the Republic of Yemen relies on the oil business as a cornerstone of its economy. Bordered by Saudi Arabia, Oman and the Gulf of Aden, Yemen exports most of its daily oil production of 387,500 barrels.
Yemen has proven reserves of 3.72 billion barrels, according to the CIA World Factbook, but the Petroleum Exploration and Production Authority in Yemen estimates much more oil in place — 7.9 billion barrels.
Khaled Bahah, Yemen's minister of oil and minerals, was in Houston last week to meet with partners in its first liquefied natural gas project, which is now under construction. He spoke with the Chronicle's Kristen Hays about the country's activities, his view on Halliburton Co.'s plan to open a second corporate headquarters in Dubai, United Arab Emirates, and Venezuelan President Hugo Chavez's nationalization of oil projects.
Q: Can you describe the oil activity in Yemen?
A: Right now we have 87 blocks. Around 12 blocks are producing, and we have around 40 blocks under exploration. We have very extensive exploration activities in Yemen by having 40 blocks. The rest of the blocks are still open. By the second half of 2007, we are going to announce that for the first time we have special bidding just for offshore blocks. About 10 blocks will be for bid. A lot of the national oil companies have already shown their interest in joining the bidding process, and we are expecting that some of the American companies will join as well.
Q: Do you have your own refineries?
A: Yes, we have two refineries. Our capacity now is 120,000 barrels a day. We have a plan to expand our refinery capacity in Yemen, and not just for local consumption. I think we are welcoming all the companies that would like to erect and operate refineries in Yemen for internal consumption or to export refined products.
Q: What's the status of the LNG project being built with Paris-based Total as the majority partner?
A: It is our first LNG project, and now it is 45 percent complete. Two-thirds of the gas will be brought to the U.S. market, and the rest to the Korean market.
We visited a gasification plant at Sabine Pass, which Cheniere owns, where one-third of our gas will go. It's a $3.7 billion project.
Q: Halliburton recently announced it's opening a second headquarters in Dubai where the CEO, Dave Lesar, will be. Do you think it gives U.S. companies an advantage to have that highly placed of an executive on site?
A: Regardless of whether it's Halliburton or any other company, if a major part of their business is in one part of this world, I think it's appropriate to allocate themselves to that part. Being close to your business directly is much better than being far away.
I think it's a kind of breaking the culture, making the change that's always the big reaction, or the big news.
I don't want to say that Halliburton will take the lead and others will follow. Every company will try to evaluate their business. So the announcement from Halliburton, I see it from the business side. If most of their business is in the Middle East, I would say they are making the right decision.
Q: Do you foresee any issues in your country or your region similar to that in Venezuela, where the government is taking control of Orinoco Belt projects run by foreign countries?
A: No. The Venezuela case is different.
In our part of the Middle East, in general, there is no way, in the near future or in the long term, there will by any type of that. The oil companies are very strong, and they are growing from one day to another. They can run their own blocks of business, or they can have some partners or joint ventures with other companies.
I think the example of the Middle East is very, very obvious. There are very strong relationships between all the international oil companies and the national oil companies. Chron
