How a Handful of Elites are Plundering the Oil Wealth of the Nation

English Reports

الأربعاء, 25-12-2019 الوقت 09:45:39 مساءً

Summer Ahmed| According to a report published by Reuters in July, Yemen’s internationally recognized government has called on oil companies to restart production and exploration in the country.

Foreign companies have headed the call, and multiple meetings have taken place in Cairo Egypt, between foreign oil companies and the Yemeni oil and gas ministry. However, crippling corruption is turning investment opportunities for the nation into ‘looting opportunity’ for the oil minister and a handful of predatory elites, selling oil blocks and contracts to who pays the top commission to them, rather than to which company will generate more income for the nation.

Corruption is a serious problem in every branch and level of government in Yemen, however, the oil sector, which generates the most income for the state, is the most corrupt, in which government officials benefit from insider arrangements, embezzlement, and bribes.

Currently the Oil Minister, Aws Abdullah al-Oud heads a team of corrupt people specializing in plundering the country’s wealth and capabilities under various headings, to make commission off selling shady oil contracts.

For the past couple of months, al-Oud and his team, which include the General Manager of the Yemen Investments Company for Oil and Minerals (YICOM), Abdullah Nasser Omair, with his deputy for technical affairs, Adel Sharef Al-Hamadi, in addition to the rising star in the business of oil corruption, Deputy Director General for Financial and Administrative Affairs named Hani Saleh Al-Ashalah, are busy promoting oil sector 4 which is located in Shabwah South Yemen.

Sources from inside the oil ministry said that the promotion of Sector 4 is a scheme to sell the nations resources for personal financial gains, depriving the citizens any benefit from these resources. They broker these deals privately with willing foreign partners, stabbing the national economy in the back without the slightest fear or intent to advance the national economy in the process.

The source explained that these days, in Cairo Egypt, the Yemeni oil minister and his partners are in the process of promoting Sector 4 in order to mortgage and sell it for a period of time to a foreign company that commissioned them, even though, sector 4 is fully operational and generating revenue and there is no need to bring in a foreign partner.

In addition, sector 4 has been transporting crude oil from OMV since March 2018 and started transporting oil from SAFER in Marib in mid-October 2019. The source also added, that it is estimated the sector will be transporting 50,000 barrels of crude oil per day and the quantity will increase gradually over the coming months to 80,000 barrels per day, which will generate hundreds of millions of dollars that will go to a small group of elite government officials and not benefit the state.

Sector 4 is not the only oil block the oil minister and his team have been manipulating for personal gains. Currently a pipeline is being built from Block 5 (Jannah) to Block 4. The purpose of the pipeline is to transport SAFER oil outside the country, to sell in the international market and hide the money.

Photo of pipeline being built from Jannah Block 5 oil sector to Block 4 in Shabwah South Yemen.

Block 5 is owned by the Chinese United Energy Group Limited, which it acquired from Kuwait Energy. Previously this Block was owned by the American Hunt Oil Company. Many oil contracts are being awarded to the Chinese, including for oil exploration and production equipment.

Also Block S-1 which was acquired by PetSec Energy in 2016 is currently at the center of a corruption scheme by Oil Minister al-Oud and The General Manager of YICOM Abdullah Omair. We received copies of letters sent by PetSec to the oil minister, asking for consent to start production at S-1 and transportation permission through Sector 4 which is operated by YICOM. We were informed by a source in the ministry that permission has not been granted to PetSec because PetSec refused to pay the commission amount requested by Minister al-Oud, and also refused a proposal by al-Oud to have one of his family members as a local partner with Petsec.

The Source also explained that the oil minister wants PetroMasila which operates in Hadhramout, about 400km from Block S-1 to be the exporter, instead of YICOM which operates in Shabwah and not very far from S-1. This scheme is a way to make more money on transport for the oil minister and his friend’s transportation company which will carry the crude from S-1 to the PetroMasila facility.

While the world, including President Hadi himself is distracted by the war in Yemen, these predatory elites run corrupt operations — selling the wealth and capabilities of the nation for personal profit — without fear of reprisal, because they know Yemen has a very weak bought and paid for justice system.