Eric Watkins
Senior Correspondent
LOS ANGELES, Nov 22 -- Yemen Exploration & Production Co. (YEPC), a venture of Hunt Oil Co., ExxonMobil Corp., and South Korea's SK Corp., said operations in oil fields in Yemen's Marib region have come to a halt after the alleged violation of a contract by the Yemeni government.
YEPC filed for arbitration with the International Chamber of Commerce in Paris, claiming the government expropriated Block 18 (the Marib Al-Jawf Block) on Nov. 15.
The joint venture has produced oil from the block for about 20 years under a production sharing agreement passed into law in Yemen in 1982. A 5-year extension of the agreement, signed on Jan. 4, 2004, took effect Nov. 15.
According to a statement by Hunt Oil, the government "has taken numerous actions to prevent YEPC from exercising its duties as operator of Block 18." It called the action "without precedent in Yemen" and said the government has attempted to replace YEPC with government-owned Safer Exploration & Production Operations Co.
Operations associated with the Marib PSA include a central production unit able to handle as much as 400,000 b/d of oil, a 10,000 b/d refinery, a 263-mile pipeline with capacity of 225,000 b/d, and four gas processing plants with capacities exceeding 1.6 bcfd.
Hunt Oil holds a 38.5% stake in the venture; ExxonMobil has 38%, and SK holds 15.7%. The remainder is held by the Yemeni government.
Contact Eric Watkins at [email protected].
