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INTERVIEW
Last updated: 10:20:51 PM GMT(+03) Saturday, 10, April, 2010
 
 

Ali Ashal
Member of Parliament for the Islah Party

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Interviewed by Abdul Baset Al-Qaedi
For The Yemen Post in Cooperation with Alahale.

Abdul Baset Al-Qaedi: Being a member of the Extractive Industries Transparency Council (EITC), what have you done over the one year and a half?
Ali Ashal: The members have tried to enhance the levels of transparency as for extractive industries. The council endorsed a set of procedures and rules which regulate its work; however, we have been faced with several problems at the top of which are the persistence of oil companies that decisions of the council should be agreed on by all the council’s members.

AQ: Who are these companies?
AA: Oil companies working in Yemen including Total, Nexen and the Safer Exploration and Production Operations Company. Transparency has its own consequences whether for the government or oil companies. It is difficult to achieve transparency through an agreement and all parties that are part of this initiative are to pay the tax for that.

AQ: Do these companies refuse to disclose their production and financial statements?
AA: In principle, these companies do not disclose information; however, they say that the council’s task is to have a copy of its financial statements to make sure that they are compliant to those handed in to the government. They do not want our role to exceed such a limit; yet the Global Transparency Initiative granted every country the freedom to act under no limits in any method that it sees suitable for achieving its goals. It set different methods for verification like reconciliation, auditing, etc. and we have chose reconciliation methods with taking samples for auditing.

AQ: You take random samples?
AA: The council has the right to take samples for verification through an accountant appointed by the council’s members.

AQ: So the companies still reject such a method?
AA: Unfortunately yes. This is what has stopped the council’s works. We have reached a dead end. If things remain so, then we will be cheating on others as we claim to be doing our job. We tried at some point to issue a report, but there were differences over the accounting form at which the financial statements will be audited.

AQ: In sum, you have achieved nothing?
AA: Yes. This is actually the case. We are back to square one. Accepting such an initiative by Yemen is just for showing that we do not fear initiatives; however, when it comes to application, we find that we are unable to realize them.

 

AQ: So there are some big hands behind these companies which encourages them towards concealing information?
AA: It is so. We have dealt with several oil issues including block 53 and Hunt Oil Company’s case which was later resolved through an international arbitration. The judges concluded that the government was lenient towards the company and they were both working in a dark room until the parliament disclosed the case. The problems faced by EITC lies in the fact that some government parties do not want it to achieve its objectives and they fear transparency because it affects the interests of many people.

AQ: Late Sheikh Abdullah Al-Ahmar once said that nobody knows the real figures about oil save Allah and someone else?
AA: This could be true to a great extent and President Saleh sent a letter to the government speaking about brokerage in oil field. For seven years, we have been speaking about this sector and the vagueness that shrouds its administrations as 40 percent of its revenues are wasted in brokerage operations starting from marketing of oil blocs and ending with marketing the produced oil.

AQ: Some blocs are granted as concessions to state influential personalities?
AA: The oil blocs were granted without fair bidding and there were directives to grant this bloc for (x) and that bloc for (y). The ‘named’ bloc was granted to a certain person because it was there for him.

AQ: You have been a member of Oil and Development Committee since the time you joined parliament. Do you have exact figures about oil production and have you tried to get such information?
AA: The Ministry of Oil and Minerals issues booklets about oil, gas and minerals and it also issues an annual book which defines the volume of oil produced in each bloc; however, there are some people who doubt such figures and there are no parties tasked with verification.
AQ: You deal with official statistics … can you assure that these statistics are right?
AA: We can enter oil blocs, but we receive the same information disclosed to the government.

AQ: But the Transparency Council is commissioned to verify these figures?
AA: Yes, the council has the right to verify all statistics and information and investigate certain operations in oil blocs. When verifying production operations, you find an unreasonable rise for production costs. In 2004, about 21 million barrels were taken as production costs (taken before calculating the shares of the government and the producing company) and by then the value of this deducted oil quantity was $771 million (an oil barrel was sold against $32. The next year, about 24 million barrels were deducted and the value of this quantity was about $1.3 billion and it increased to about $1.4 billion in 2006. Though no new oil wells entered service and though oil produced quantities have been dropping since 2007, the deducted quantity has remained the same (about 21 million barrels). In the case of bloc 18, the production costs were reduced to half after Safer had taken over the company. Production costs include the money paid to local subcontracting companies providing logistical services, mostly owned by state high ranking officials. Even security companies working in the oil field are owned by such officials and they receive $700 for each security man employed while the security guard only gets $250. Some commanders of army also receive money on the basis that they provide services to these blocs. All these sums are calculated as production costs and this causes such costs to increase markedly.

AQ: You have so far been unable to issue a single report, will you continue?
AA: A person might get frustrated. In a recent meeting with the Minister of Oil and Minerals and the Minister of Planning, we understood that they want these initiatives to be reduced and other interested groups see that such initiatives should be adopted and remain under a certain limit.

AQ: Some speak about a dubious deal upon which Aden Port was handed to DP World?
AA: We have no interest in having DP World as the operator of Aden Seaport because Dubai is among the competing ports. The company is investing huge sums of money in developing and deepening Dubai and Djibouti ports, while doing nothing in Aden. DP knows very well that if the port was awarded to a specialized company, this will create a real contender for them and other ports in the region, so DP was keen about taking over Aden’s port.

AQ: I think the government is in need to increase its resources and will not sacrifice Aden Port?
AA: Through my experience as a member of parliament, I see that the personal interests are prioritized over the national interest. In most cases, the national interest is sold for obtaining personal ends.

 

 

 

 

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