Yemen’s national oil company, Safer Exploration Production and Operations Company (SEPOC), could face an international court case if the government of Yemen can’t apply the contractual terms of the Ras Isa oil terminal project with Chemic-Tech.
In March 2013, Chemic-Tech was successfully chosen by the Ministry of Oil and Minerals, SEPOC, and a consultant company as the company to build the Ras Isa onshore oil terminal. The contracting company is not satisfy about the long delay of payment claims as per the agreement with SEPOC.
According to the contact, the government of Yemen has paid only $3 million out of the total project cost, when the ground work on the site reached over 30% of the total project. The Rass Isa oil terminal was supposed to be constructed 20 years ago by former American operator Hunt Oil, who instead, for various reasons at that time, installed the existing floating storage and offloading vessel FSO SAFER.
The completion of the project is questionable, with the slow response of the Ministry of Oil and Minerals and the Ministry of Finance who up today failed to release the company’s instalment payments.
The deteriorating political situation in Yemen should not be a reason for losing investment opportunities. Five oil companies, OMV, Jannah Hunt, OXY, and Calvally in addition to SEPOC and YLNG, may lose the chance to export their crude oil if any harm happens to the aged FSO SAFER. SEPOC is still operating well, but the risk of its suspension will cost the government a lot of money and the five oil companies production would definitely stop for at least a year.
A reliable source at the company told National Yemen that the total cost of the project was deposited to the company account from charges of the five oil companies pay for using the Pipeline to store and export their oil. The former Finance Minister, Sakher al-Wajeeh, has forcefully asked Safer and the Ministry of Oil and Minerals to hand over the amount into the Ministry of Finance account, who will pay on behalf of company as part of government rules and regulations. “Unfortunately, this was a trick from the former minister and the project is at risk. It’s not just the project, but the country’s reputation is at risk too with international contractors,“ said the source.
The Ras Isa oil terminal project is a strategic investment for the government of Yemen, and its success will bring new investors to Yemen. SEPOC is calling on the President, the Prime Minister, the Minister of Oil and Minerals, and the Finance Minister to help the company achieve the terminal project as per the agreement with contracting company.