Total buys into Yemen's Block 72 oil and gas concession

01 July 2010

French oil major acquires a 36 per cent interest in exploration and production at central Yemen concession

French energy major Total has acquired a 36 per cent interest in the Block 72 oil and gas exploration and production concession in Yemen for an undisclosed fee.

The company announced the deal, which is subject to approval by the Oil and Mineral Resources ministry, on 30 June.

Total will join Norway’s DNO, Canada-headquartered TransGlobe Energy, Yemen’s Ansan Wikfs and The Yemen Company in developing the block.

TransGlobe will reduce its interest in the concession to 20 per cent from 36 per cent as a result of the deal, the company said in a 29 June statement. It remains unclear how the shareholdings of the other partners will be affected.

The companies were awarded the concession in Yemen’s third international oil and gas bid round in November 2006.

The 1,821 square kilometre concession sits in the southern part of the Masila Basin in central Yemen. The partners plan to drill an exploration well in the fourth quarter of 2010.

The deal comes amid fresh signs that international oil companies in Yemen are renewing their interest in the country despite continuing security fears.

Sources close to the Yemeni government say that it is planning a fourth bid round before the end of 2010 and that new exploration and production sharing agreements have been drawn up after lengthy talks with a number of potential international partners.

Total has majority interest in three other concessions in Yemen, Blocks 69, 71 and 70. It is also the majority shareholder in Yemen LNG [liquefied natural gas], which developed one of the largest projects ever conceived in Yemen at a cost of $4bn.

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