DECEMBER 24: European financial support for Yemen increased to 33 million European Currency Units (ECU) in 1998 and is expected to reach 36 million ECUs in 1999 (26 September newspaper).

DECEMBER 13: President Salih in France for talks with President Chirac. Discussions were believed to include development of oil and gas sectors. In 1997 imports from France to Yemen totalled $381, while exports to France were $56 million.

DECEMBER 3: The Saudi Binladen Group will head a consortium to improve Aden airport at a cost of $24-million. The project will be 80% funded by the World Bank, with France and Yemen contributing the rest (Reuter 3.12.98). The Bin Laden family originally came from southern Yemen; they disowned their most famous member, Usama bin Laden, several years ago.

DECEMBER 2: Yemen LNG Co. says it expects to sign heads of agreement with British Gas Plc in 1999 to supply 2.65 million tonnes of liquefied natural gas (LNG) per year. The 25-year deal is to supply gas to the Pipavav project in Gujarat, India. Shipments from Bal-Haf on the Gulf of Aden are expected to begin in 2002-2003. Yemen has an estimated 14 trillion cubic feet of gas reserves. Shareholders in Yemen LNG are Total (France) 36%, Yemen Gas Co. 21%, Hunt Oil (US) 15.1%, Exxon 14.5%, SK Corporation (S Korea) 8.4% and Hyundai (S Korea) 5%.

NOVEMBER 12: Ocean Energy, Inc., of Houston, Texas, announced a 31% increase in production for the nine-month period to September 30, compared with the same period in 1997. Despite this, the company made a loss for the period of $9.1 million as a result of lower oil prices.

Regarding Yemen, the company's statement said: "Ocean acquired a 70% working interest in the 670,000-acre Yemen Block 43. The Block is situated adjacent to CanOxy's Block 14 (currently producing 200,000 bpd) located in the productive Masila Basin in East Central Yemen. Ocean, as operator, plans to begin preliminary seismic and geologic data gathering in 1999 with initial wells planned for early 2000."

NOVEMBER 9: A cabinet meeting on November 9 approved Yemen's budget for 1999. Expenditure will be 335.6 billion riyals ($2.4 billion) - a reduction of 14.5 billion riyals on bugdeted spending for 1998. Forecast revenue for 1999 is 294.4 billion riyals ($2.1 billion) - down 42.2 billion riyals on 1998.

This leaves a projected deficit of 41.1 billion riyals - about 14 billion more than the deficit forecast for 1998. However, the actual deficit for 1998 may be higher than forecast (despite austerity measures) because of the fall in oil prices. Yemen depends on oil for about 65% of revenue.

NOVEMBER 7: Alcatel, the French telecommunications company, has won a $5.2 million contract to install about 59,000 new telephone lines in Yemen over a period of eight months. According to the SABA news agency, when the project is completed, Yemen's 17.5 million people will have more than 472,000 telephone lines.

NOVEMBER 4: President Ali Abdullah Saleh said Yemen's ports and airports may be privatised. He gave no further details.

OCTOBER 28: Canadian Occidental Petroleum signed a memorandum of understanding with the oil ministry for four concessions - two in Hadramawt and two in al-Mahara. The four adjoining blocks - 11, 12, 36 and 54 (see map) - cover 12 million acres in a relatively unexplored frontier area.

The move marks a continuing expansion of CanOxy's portfolio in Yemen. Earlier this year, it acquired an interest in two other exploration blocks - 50 and 51.

The company also has a 52% interest in Block 14 (Masila). Since 1991, almost 800 million barrels of oil have been discovered on this block and more than 300 million barrels have been produced. According to CanOxy, during the past eighteen months, proved and probable reserves have increased 20% while gross production has increased 11% to over 200,000 barrels per day.

Victor Zaleschuk, President and Chief Executive of CanOxy, said, "Our objective in Yemen is to continue to build on our significant successes with continued growth well into the future. The addition of four new exploration blocks to our exploratory acreage gives us the largest exploratory land position in Yemen."

OCTOBER 27: The Central Bank of Yemen raised minimum interest rates to 15%. It was the second increase in nine days. The previous rise, on October 18, was from 10% to 12%. It also increased the amount of cash that commercial banks must deposit with the Central Bank: dollar deposits from 15% to 20%, and riyal deposits from 10% of to 15%. The value of the riyal has declined in the last few weeks to 146 to the dollar.

OCTOBER 21: Occidental Petroleum reported that its third quarter net income fell more than 75% to $38 million compared with $157 million a year ago because of low oil prices. However, in Yemen, its drilling programme continued to exceed expectations. A statement said: "Seven successful development wells were drilled on the Masila Block during the quarter. Four wells were tied-in to production facilities and are currently producing at a combined rate of 19,000 barrels of oil per day. The remaining wells will be tied-in in the fourth quarter at initial rates of approximately 20,000 barrels of oil per day. Production from the Masila Block continues to set new records and is currently at 205,000 barrels of oil per day (106,600 net to CanadianOxy)." [Click here for report.]

OCTOBER 8: The government has delayed a further cut in the subsidy on diesel prices, which was due in September. Currently diesel sells in Yemen for only 50% of the world price. The increase, which is not now expected before the end of the year, will particularly hit farmers because the fuel is not only used for agricultural vehicles but also for pumping water.

OCTOBER 4: The World Bank has urged Yemen to halve the number of government employees from 400,000 to 200,000 by the year 2003 in a move to reduce public sector spending. The bank has allocated $25 million for projects to generate income for some of those who will lose their jobs. President Salih has already called for a freeze on new public sector appointments and promotions.

SEPTEMBER 23: Re-interpretation seismic data indicates that the Tasour oil structure in Block 32 may be larger than originally thought, according to TransGlobe Energy Corporation, which has a 9.81 percent working interest. Two appraisal wells and one exploratory well are to be drilled during the first quarter of 1999. Subject to government approval, TransGlobe will hand over operation of its interest in Block S-1 to Vintage Petroleum in October. (Click here for more details)

SEPTEMBER 22: Yemen signed an agreement under which the United Nations World Food Programme will provide $13.7 million to purchase food for state schools. (Saba news agency, 22.9.98)

SEPTEMBER 16: Yemen received $70 million from the International Monetary Fund, part of a package worth around $600 million in total. The Central Bank of Yemen said the aid would strengthen the bank’s reserves and will guarantee imports for five months, according to al-Thawra newspaper.(AFP)

SEPTEMBER 15: The oil ministry has assigned a 75% working interest in the production sharing agreement for the S-1 Damis block to Vintage Petroleum of Tulsa, Oklahoma, the company announced. TransGlobe Energy will transfer operatorship of the S-1 block to Vintage, subject to ministry approval. S-1 was initially explored by a Soviet auspices and most recently by Royal Dutch/Shell during 1990-93. Eight wells have been drilled in the block, four of them by Royal Dutch/Shell. Several encountered oil shows. S-1 covers more than one million acres (4,484 square kilometers).

According to Hoover's company profiles, "Vintage Petroleum makes a living from what other oil and gas producers have been willing to leave behind. The company buys producing properties in the US and South America and tries to increase their yields through various reworking techniques." It has interests in producing wells in 10 US states. International operations have focused on Argentina and Bolivia.

Yemen approves Vintage farm-in - Reuters
Vintage Petroleum, Inc. Receives Assignment Of Production Sharing Agreement in Yemen - PR Newswire

SEPTEMBER 14: About 200 technicians and engineers employed by Yemen’s national airline, Yemenia, went on strike over pay. They returned to work next day after the company reportedly gave "firm promises" to satisfy their demands. Salaries are $250-$500 a month. The union said 16 flights were cancelled. In May 1997, pilots went on strike for three days, and in July 1997 about 4,000 airport workers were awarded a 30% increase after a one-day strike. Yemenia has 15 aircraft, including seven Boeing 727s and 737s and three Airbus A-310s.

SEPTEMBER 9: Yemen expects to increase its oil production from 415,00 to 450,000 bpd from October, according to the Oil Ministry. The increase is expected to come from the Jannah oilfield. More than half Yemen’s production comes from Canadian Occidental’s Masila field. Yemen depends on oil for 85% of its export revenue. (Reuter)

AUGUST 25: More increases in the price of wheat and flour are on the way, President Salih told a conference on financial and administrative reform in Sana'a. But the president said he hoped this would be the "last dose" in the removal of subsidies on basic goods, prescribed by the IMF and World bank. The two previous rounds of increases required by the same aid package - in October 1997 and June this year - led to riots.

AUGUST 24: The World Bank is discussing ways to help Yemen deal with its unexpected budget deficit, brought about by the fall in oil prices. The bank's Middle East director, Inder Sud, was quoted by agencies as saying he had discussed "a programme that makes a start in improving the management of public expenditures." He added: "I am hopeful that we would be able to mobilise the necessary financial resources to meet at last some of the shortfall in the development budget."

Since 1995, the World Bank has provided 360 million dollars, mostly for balance of payments, agricultural, infrastructure and social projects. Under a package of measures agreed with the IMF and World Bank in 1995, Yemen reduced its budget deficit from 17.5% of GDP in 1994 to four percent last year and reduced inflation from 71.3% in 1994 to 15% in 1997. This year, however, the budget deficit is running at nine times the projected level. Mr Sud praised Yemen's economic reforms so far, but warned: "Not enough has been achieved in the administrative reforms sector or in combatting corruption ... There must be progress in this field in order to continue our project." (Reuter, AFP)

AUGUST 23: Reserves in the Masila oil field, operated by Canadian Occidental Petroleum (CanOxy), have increased from 600 million barrels in 1997 to 700 million this year. The oil ministry believes a further increase to 850 million is possible (al-Ayyam 23.8.98).

AUGUST 22: Yemen’s oil revenue for this year is likely to be no more than $650 million - 40% down on 1997. Revenue last year was about $1.1 billion. An official at the Oil and Mineral Resources Ministry, interviewed by Reuters, blamed the falling price of oil, which is at a 10-year low. About 65% of state revenue comes from oil.

AUGUST 8: Production of the first liquefied natural gas (LNG) at the new plant in Balhaf has been delayed until the year 2003 because of the downturn in Asian economies. Shareholders in the project, run by the Yemen Liquefied Natural Gas Company, include Total (36%), Exxon and Hunt Oil (about 30% held jointly). Initial design work on the plant, with a projected capacity of 5.3 million tonnes per year, has already been completed, and the company will go ahead with sales and marketing agreements.

AUGUST 8: The Italian company, Agip, signed a memorandum of understanding with the Yemeni government for oil exploration in Block 2 (al-Maabar) in Shabwa province [see map]. The exploration, which will take nine years, involves surveying 600 sq km and digging four wells, at a cost of more than $20 million.

AUGUST 5: Revenue from Yemen’s oil exports was only $254.58 million in the first half of this year, compared with $1,012 million during the whole of 1997. Yemen produces about 380,000 barrels per day, of which 57% is exported.

AUGUST 5: The foreign assets of the Central Bank of Yemen rose by $5.2 million to $967.5 million in May. Assets at the end of 1997 were $1.229 billion.

JULY 27: Canadian Occidental Petroleum has announced significant additions to its reserves in the Masila block, which it describes as a "world class asset". In a report on July 24, the company said it had drilled seven successful development wells in the block during the first half of this year, resulting in the addition of 71 million barrels of proved reserves. This brings Canadian Oxy's share of proved Masila reserves to 208 million barrels - a proved reserve life of 5.6 years.

The company added: "We are aggressively expanding the Masila exploration and development programme ... With the largest exploratory land position in Yemen, we intend to capitalise on our control of the extensive Masila infrastructure and extensive knowledge to create further long-term opportunities in this area."

JULY 18: Yemen was among poor 18 countries and regions named by the United States on July 18 as eligible for food donations. A total of up to 2.5 million tonnes of wheat will be distributed. The scheme is partly humanitarian but is also intended to help American farmers by boosting grain prices, which are low at present.

JUNE 18: After much hesitation, the government finally decided to implement the latest phase of the World Bank/IMF economic restructuring package which was agreed in 1995. The following price increases were announced:

Petrol......... up 40% to 35 riyals ($0.27) a litre
Kerosene....... up 15% to 15 riyals a litre
Cooking gas.... up 25% to 200 riyals per cylinder
Wheat.......... up 35% to 900 riyals per 50 kg (110 lb)
Flour.......... up 35% to 1,330 riyals per 50 kg

Serious riots resulted.

JUNE 6: The economic crisis in Southeast Asia and the slump in oil prices are taking their toll on Yemen's fragile economy. According to the new government's programme, presented to parliament on June 1, lower oil prices caused a drop in foreign revenue to $236 million in January-March, compared with $378 million in the same period last year. The deterioration is expected to continue.

"These developments led to slowness in completing price reforms on schedule and a rise in the general budget deficit in a very dangerous way," the statement said. "The real deficit at the end of April 1998 reached 36.2 billion riyals ($280 million) while the planned deficit for the same period was estimated at about 4.4 billion riyals."

Originally, Yemen's budgeted deficit for the whole of 1998 was 13.5 billion riyals, based on revenue of 336.6 billion riyals and expenditure of 350.1 billion. This looks likely to be greatly exceeded.

The government's programme promises continuing economic, financial and monetary reforms, together with "a comprehensive nationwide programme for administrative, employment and legal reforms." It also promises tough action to combat kidnapping and further efforts to resolve the border dispute with Saudi Arabia.