LawFuel – In November 2005 YEPC, a joint venture owned by ExxonMobil and Hunt Oil, commenced arbitration proceedings against Yemen over an alleged five-year extension to a 20 year Production Sharing Agreement (PSA) in respect of Block 18, a major oil producing block.
Michael Goldberg, a partner at Houston law firm Baker Botts, representing YEPC, was reported at the time saying:
“Since 2004, YEPC has invested millions of dollars at the direction of the Yemen Government. Up until Nov. 15 , we fully expected they would honour the contract. The Government of Yemen had no right to take over this operation, and although we did not want to file an arbitration, they gave us no choice.”
An ICC Tribunal has recently dismissed YEPC’s claim that a five year extension was effectively granted and has declared that the PSA between YEPC and Yemen expired on November 14 2005.
Yemen has confirmed that it will abide by the decision of the ICC Tribunal.
Ben Knowles, a Partner at Clyde & Co representing Yemen says “We are delighted with the successful result for Yemen which entirely vindicates their position that the PSA expired on November 14 2005.”