YEMEN 2006 REPORT ON INVESTMENT DISPUTES AND

UNCLAS SANAA 001788 SIPDIS SIPDIS PLEASE PASS TO EB/IFD/OIA FOR JAMES ROSELI; L/CID FOR EMILY DAUGHTRY. E.O. 12958: N/A TAGS: PGOV PREL CASC KIDE EINV ECON YM SUBJECT: YEMEN 2006 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION CLAIMS REF: SECSTATE 60294 ¶1. The United States Government is aware of two ongoing claims of United States persons against the Republic of Yemen Government (ROYG). The following information is keyed to reftel instructions. -------------- Claim 1: Property Dispute -------------- a. Claimant A b. 2005 c. Claimant A opened an American Citizen Services property case with the Embassy on 25 September 2005 regarding his claim against the Sanaa Governate. Claimant A contends that the Governate seized 113 "libnas" of his land (a libna is a local unit of land area equal to roughly 210 square meters). The seized portion of land is part of a larger 250-libna block in the Beir Obeid zone of Sanaa where the government is planning to build a new road. According to Claimant A's lawyer and an official in the Sanaa Governate Capital Secretariat, compensation for the land seizure would require SIPDIS the personal approval of Sanaa's mayor. To date, Claimant has received no decision on compensation in the case, though local officials say the responsibility for pursuing the compensation claim lies with Claimant A. Rather than pushing for compensation, Claimant A maintains that the entire seizure is inappropriate and that the property should be returned. -------------- Claim 2: Canceled Oil Concession -------------- a. Claimant B b. 2005 c. On 14 November 2005, Claimant B's production sharing agreement (PSA) with the ROYG expired. The PSA covered an oil concession in Block 18 in the Mareb region, and was taken over by the Government-owned Safir Exploration and Production Operations Company. Claimant B signed a five-year extension agreement with the Ministry of Oil in January 2004, and believes the agreement is binding. The claimant also argues that the ROYG required the company to commit to additional investments based on the extension agreement. The ROYG contends that the agreement required, and failed to obtain, parliamentary approval and is therefore not legally binding. Claimant B filed arbitration procedures against the ROYG on 21 November 2005 before the International Chamber of Commerce in Paris, and seeks damages of more that USD 1 billion. The case is ongoing, and post expects both sides to abide by the outcome of the ICC. -------------- Identity of Claimants -------------- Claimant A: Noman Al Huth. American citizen at time of taking. Has not signed Privacy Act Waiver. Claimant B: Yemen Exploration and Production Company. An American company at time of taking, comprised of Hunt Oil Company and Exxon Mobil Corporation. The company has not singed a Privacy Act Waiver. Krajeski