Yemen begins review of foreign oil contracts

02 October 2012

Anti-corruption authority investigating oil company expenditure

Yemen’s Supreme National Authority for Combating Corruption (SNACC) has launched a review of the government’s oil contracts with international oil companies.

The SNACC has asked to see all agreements signed with the oil companies and will seek to review the company’s expenditure, according to Ibrahim al-Halali, an official with the SNACC, the local Yemen Post reports.

He affirmed that SNACC has a plan to follow up the projects and review the expenditures of the companies, stressing that some companies committed breaches and made mistakes.

The SNACC was established in 2007 as an independent agency with the authority to investigate corruption, refer government officials for prosecution and retrieve funds. Investigations were widely held to be pressured by the office of former president Ali Abdullah Saleh. It has been emboldened since his ousting in February 2012.

Yemen plans to invite international oil companies to bid for exploration and development rights in five oil blocks around the country. A date for the auction is yet to be announced.

The government has been under considerable public pressure by ongoing civil unrest. A number of rallies have targeted the oil and gas sector, in particular demanding the cancellation of a liquefied natural gas (LNG) export deal with South Korea. These calls have also received support from some members of parliament.

Yemen LNG, a joint venture involving French oil major Total and three South Korea companies, began operations in 2009. Pipelines feeding gas to the gasification facility at Balhaf on Yemen’s coast have been the target of attacks by militants in recent months.

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