Are Political Risks of Oil Exploration Becoming Clearer?
Marib Arbitration Comment The Yemeni oil exploration sector is at a crossroads. As the major producing fields decline, Yemen has recently been looking for, and attracting, interest from the oil industry’s major players. The two most recent licensing rounds – the latest closed on April 15 2006 – saw applications from, among others, Total, Petronas, DNO, OMV, Petrobas, Repsol and Sonatrach. The activity in this sector is taking place against the background of widely reported legal proceedings involving the government and two major oil companies with longstanding interests in Yemen. The oil companies allege that the government has expropriated their assets illegally. Foreign investors will be keeping a watchful eye on developments in this case, as it is expected to help clarify the political risks facing ‘big oil’ companies in the country. Marib Arbitration In November 2005 the Yemeni government took back the Marib oil field concession from YEPC, a joint venture company owned by Exxon Mob
