CAPITAL: SANAA
MONETARY UNIT: RIAL
REFINING CAPACITY: 130,000 B/D
OIL PRODUCTION: 440,800 B/D
OIL RESERVES: 4 BILLION BBL
GAS RESERVES: 16.9 TCF

Vintage Petroleum Inc. said the first of three wells in its S-1 Damis Block found 100 ft of net pay in two Alif zones and 40 ft of potential pay in an upper dolomite section.

An Naeem No. 1 flowed a combined 47.7 MMcfd of gas and 1,265 b/d of condensate from the two primary Alif zones. The upper dolomite flowed 7.7 MMcfd of gas and 245 b/d of condensate, but there was no market for the gas in Yemen, Vintage said.

The well was drilled to evaluate a possible extension of Halewah oil field, which was producing 25,000 b/d from an oil rim under a gas cap, also from the Alif, on an adjacent concession.

Nexen Inc., Calgary, the former Canadian Occidental Petroleum Ltd., signed a memorandum of understanding in January 2001 for a production sharing agreement for Block 59.

It would be Nexen's seventh block in Yemen. Block 59 near the Yemen-Saudi border, 250 km north of Nexen's Masila block, was producing 230,000 b/d of oil.

Nexen would operate the block with 60%, and Occidental Petroleum Corp. would hold 40%.

Nexen was the most active oil company in Yemen, with more than 23 million undeveloped acres. Much of the acreage was along Yemen's northeastern border where the company was targeting Paleozoic plays.

The company planned to shoot 1,000 km of seismic and drill one well on Block 59.

Occidental also signed an agreement to explore Block 44 in the Hadramaut province in the center of the country.

The block covered 6,335 sq km just north of its holdings in the Masila (Block 14) and East Shabwa (Block 10) operations, which in 2000 produced more than 250,000 b/d.

Occidental said it expected the geology of Block 44, in the Sanyun-Masila basin, to be similar to Masila.

The exploration phase was expected to take 3 years, with drilling operations to begin in early 2003.

Occidental held 75%, and partner Ansan Wikfs (Hadramaut) Ltd., of Yemen had 25%. The Yemen Co., Yemen's national oil company, had a 7% carried interest if commercial quantities of oil were discovered in the block.

Yemen approved a production-sharing agreement for Sabatain Block 20.

Adair Yemen Exploration Ltd. would operate the exploration phase of the block. Partners Nexen and Saba Yemen Oil Co. Ltd. would carry Adair Yemen through 3D seismic acquisition and would cover 70% of the additional operating costs.

Adair held 30%, Nexen 50%, and Saba 20%. The interests were subject to a 5% carried interest held by Yemen Co.

Adair said the block could hold up to 340 million bbl of recoverable oil. The group planned seismic work in 2000.

PT Bumi Modern of Indonesia agreed to fund the costs of a drilling and testing program on Block R-2 in exchange for up to 59% of the outstanding stock of Pertacal Energy Inc., Calgary.

Pertacal had 50% of Block R-2. Bumi would spend an estimated $16 million on the project.