Abu Dhabi signs oil and gas deal with Yemen

Source: The National, by Tamsin Carlisle
13/12/2010

DOHA // Mubadala Oil and Gas and the Yemen Company for Investments in Oil and Minerals (YICOM) have signed an agreement to co-operate on oil and gas exploration and production in Yemen.

The two state-owned companies signed the agreement yesterday in Sana'a, the capital of Yemen, in the presence of Amir al Aydarus, the country's oil and minerals minister. It covers information sharing and a plan to assess potential joint projects including the redevelopment and expansion of Yemeni fields plagued by declining oil and gas output.

"The Yemeni government has created an attractive investment environment in the upstream sector, and we believe Mubadala can use its ability to act as a powerful catalyst, working with YICOM, to open up new oil and gas opportunities in Yemen," said Suhail al Mazrouei, the deputy chief executive of Mubadala Oil and Gas.

The company is the overseas upstream petroleum arm of Mubadala Development, a strategic investment company owned by the Abu Dhabi Government. It has targeted the MENA and Caspian regions and South East Asia for investment.

Yemen, the poorest Arab nation, has been suffering from declining foreign revenue as its oil production falls amid an upswing in political instability and lawlessness.

The UAE Government this year has promoted international efforts to help Yemen overcome its economic and security challenges, which many consider a threat to regional stability.

"We call upon the international community to stand by the government of Yemen and extend to it the necessary assistance and support, in order to enhance its capacity to fulfil the requirements of fighting terrorism, restoring security and achieving stability and development," Sheikh Abdullah bin Zayed, Minister of Foreign Affairs, told the UN general assembly in New York in September. He said the UAE was keen to offer its support to Sana'a.

At a concurrent ministerial meeting of the Group of Friends of Yemen, participants including Sheikh Abdullah stressed the importance of international and regional co-operation with Yemen, especially on economic development.

Ali Mujawar, the prime minister of Yemen, has argued that the country's "basic problem" is economic.

Yemeni oil output fell 36 per cent between 2001 and last year, from 466,000 to 298,000 barrels per day.