Yemen is likely to experience significant drops in tourism this year after three months of anti-government protests.

Tourism revenues increased by 28 percent in 2010 to nearly 1.2 billion, news agency run by the state, said today.

Number of tourists in recent increased 32 percent last year compared to 2007, nearly 1.25 million, where foreign tourists made up 52 percent of the total.

Nexen Inc. (NXY) said oil production in Yemen has been shut down due to a worker strike, and that equipment problems at its offshore oil operations in the North Sea will reduce production rates.

Problems in Yemen and the North Sea add to Calgary-based Nexen’s troubles, which have included production problems at a Canadian oil-sands operation and a negative outlook for its investment-grade credit rating by rating agency Moody’s.

The strike at Nexen’s Masila operations in Yemen began Sunday. With about 1,000 local workers represented by the Masila Labour Union making up more than 90% of Nexen’s workforce, the company had to shut-in oil production there. The shut down is expected to affect between 28,000 and 35,000 barrels of oil a day, or as much as 15% of total production.

The strike is related to an ongoing dispute between workers and management, not the political unrest in Yemen’s capital or the wave of protests against governments across the Arab world, Nexen spokesman Pierre Alvarez said.

The company also said production at its Buzzard offshore oil platform in the North Sea would be reduced due to problems with cooling equipment. A solution has been found, but production is expected to be reduced until the repairs are completed this summer.

Raymond James analyst Kristopher Zack said the strike in Yemen is likely factored into Nexen’s stock price due to the unrest in the region, but that Buzzard’s problems are more meaningful. Buzzard production was 80,500 barrels a day net to Nexen last year, or about a third of its total production. Zack estimated production at about 35,000 barrels a day during the second quarter, which could cut into cash flow per share by about 8%.

“This could be an overhang on the stock until the company demonstrates that the proper repairs are in place,” he said.

Nexen shares declined 3.2% to $23.75 in recent trading on the New York Stock Exchange.

Some 80 businessmen from the Foreign Economic Relations Board (DEİK) will accompany President Abdullah Gül on his visit to Yemen Jan. 10-11, DEİK said on Sunday.

In yesterday’s statement, DEİK also noted that the large business delegation is expected to win significant public tenders during the two-day official visit. There are a number of projects that Turkish companies have already submitted bids for, among them construction of a new airport in the Yemeni capital of Sana’a and a 96-kilometer-long highway between Sana’a and Damar al-Qarn, which is expected to cost $400 million. Another highway of 104 kilometers between the cities of Taiz and Aden will also be put out to bid when the necessary financing is found. In addition, a 4,000-kilometer-long rural road is to be constructed in the Middle Eastern country, a project expected to cost $3 billion.

DEİK’s Turkish-Yemeni Business Council Chairman Sadık Yıldız said in the statement that he expects plenty of cooperative agreements will be signed in the fields of transition to an e-state system, establishment of organized industrial zones and defense between the two countries. Yıldız noted that there are also opportunities in food, furniture and textiles for Turkish companies in the country. He finally said, as DEİK, they aim to bring the bilateral trade between Turkey and Yemen up to $1 billion by the end of next year. The current figure is hovering at around $400 million.

Although coffee is a major industry for Yemen, is still has hurdles to overcome in its quest for a global market share. The Media Line’s Felice Friedson was in Sana’a for the conference and filed this exclusive report.

(Sana’a, Yemen) They came from as far away as the United States and New Zealand to attend the Second International Conference on Arabica Naturals: the diplomats; the cuppers; the distributors, consultants and farmers. All in Sana’a to smell the rich aromatic Yemeni coffee and to seek the internationalization of standards for natural coffees.

Underwritten by the Small Micro Enterprise Promotion Service (SMEPS), a subsidiary of the Social Fund for Development and the U.S. Agency for International Development (USAID), the Arabica Naturals Conference was the first to be held in Yemen, with a strong emphasis on showcasing the sweeter side of a country that to westerners, is primarily branded a terrorist haven.

SMEPS Executive Director Wesam Qaid, the moving force behind and chairman of the conference, said the meeting — drawing from groups representing the world’s premier coffee producing nations including Ethiopia, Mexico, Indonesia and New Zealand — put Yemen back on the coffee map. “Yemen coffee is rich and is 100% taken care of by hand, no machines,” Qaid told The Media Line, explaining what differentiates Yemen’s coffee from other coffee grown elsewhere.

The two-day confab, held at Sana’a’s beautiful but heavily-fortified Movenpick Hotel, included workshops on cupping, roasting and espresso, along with professional and trade presentations and coffee exhibitions.

Kicking-off the first day of events, Yemen’s Prime Minister Dr. Ali Muhammad Mujawir praised the coffee farmers, asserting “that there is no better coffee than those of Yemen’s mountains; and we thank the farmers who raise the name of Yemen high in the world…[making] coffee an original, national symbol.” Addressing the fact that Yemen’s coffee industry lacks international standing in large part because it does not adhere to a system of grading recognized by coffee producers world-wide, the prime minister raised the industry’s concerns, admonishing that, “We must conform to the international standards of producing coffee. This requires cooperation among governments; and among international and expert officials.”

Deputy Prime Minister Abdulkarim Al-Arhabi, who is the managing director of the Social Fund for Development, told participants representing 26 countries including the US, Saudi Arabia, the United Kingdom, Germany, Italy, Eritrea and Lebanon, that, “$1.2 billion has been mobilized in a program to microfinance enterprise industry in Yemen: 90% of which is coming from foreign sources.”

Yemen, with its rich history and century-old techniques, is unique in that it consumes two-thirds of the coffee it produces. The United States has committed to contribute millions of dollars to boost Yemen’s economy, which is one of the poorest countries in the world and supports a population of 24,000,000 people.

U.S. Ambassador Gerald Feierstein is one of those who sees the focus on coffee as a welcome diversion from the typical blood-and-mayhem coverage Yemen typically receives. He told The Media Line that most Americans don’t know that Yemen is so closely associated with coffee and “I think if the American people have an opportunity to try it, they’ll also have a great experience with it. It’s a way of showing Yemen in a more positive light.”

The earliest written evidence of coffee drinking appears in the mid-15th Century, from the Sufi Yemeni monasteries in southern Arabia. But 21st-Century Yemen today faces several challenging obstacles in its quest to attain a significant global market share.

Coffee here is grown in remote areas, on steep mountain sides reaching thousands of meters in height, restricting farmers’ access and making it physically difficult to reach the growing fields with heavy manure – the natural fertilizer of preference. Qaid explained that chemicals are too difficult to carry into these remote areas.

A large percentage of the farms are located on mountains – on open patches of land scattered across mountains and terraces, some shaded by larger trees, and some by clouds according to Nadia Al-Sakkaf, editor-in-chief of The Yemen Times. Speaking to The Media Line, Al-Sakkaf painted a visual image describing “men and women jumping rocks in risky areas.” “Yet,” she said, “they still feel at home.”

Rural areas are home to 70% of Yemen’s population. Of rural dwellers, more than 80% are women because the men — and particularly the younger men — have gone to the cities in search of a better life leaving the women to tend the farms, according to Al-Sakkaf. Qaid explained the link between the nation’s agricultural and demographic concerns, saying that, “If we can improve life in rural Yemen, we can limit migration to urban areas. We need to promote economic development.”

In the conference exhibition hall, Fatma — all covered in black – manned a table sponsored by the Talouq Womens Association, an organization comprised of 164 female farmers. Fatma expounded on the problems her group is addressing, telling The Media Line that, “We lack the staff to train women on the machinery and a budget for training.”

Coffee used to be a source of income for many but because of the drought (coffee-growing requires a great deal of water); and the lack of marketing strategy, most farmers have given up on traditional farming techniques (trimming trees and shading) and many have left farming altogether. According to Al-Sakkaf, the women, who are increasingly central to the nation’s coffee farming industry, need the support of the international community to open Yemen’s access to the international market. Qaid charged that, “the Yemeni coffee private sector is marketing coffee the same as they marketed coffee 300 and 400 years ago. However, markets have changed.”

Dressed in a colorfully appliquéd hejab headcovering and jelbab, the traditional black gown, Amira Al-Hemyari tells The Media Line that as a distributor her company, El Ezzi Industries, cares about the farmers’ needs as well as its bottom line. She says it has alleviated the water shortage by supplying farmers with water storage tanks and has helped their farmers to rid their farms of the harmful Qat plant which soaks the coffee plant dry. Amira says that the narcotic-like plant, which is farmed as a separate crop – and a lucrative one at that — “takes a lot of water and gives good profit but kills the land.”

But Abd Al-Rahman Mohamed of Musallam Trading disagrees. The water shortage is a natural occurrence, he says. “We need dams for water because of the drought.”

Qat farmers outnumber coffee farmers by a margin of 680,000 to 110,000. The majority of farms have women tending trees, pruning and picking cherries. It’s common among small farmers to pick their coffee beans and store them for years, saving them for a rainy day when they are in need of immediate cash. They all work through middlemen and several key distributors who then sell the coffee beans to the local and world markets.

The Al-Hamdani and Al-Kbous companies are the two oldest and largest exporters, both of which have been around for more than 100 years.

Al-Kbous has one of the largest factories in the Middle East. Hamida Hamden Al-Safi told The Media Line that the firm currently supplies Japan, the US, Canada and the Gulf States through their forty distributors who deal directly with the farmers. The company’s mocha coffee is a source of both corporate and national pride. Al-Safi told The Media Line, “We are trying to keep the Mocha brand for our company. It belongs to Yemen and we don’t want someone stealing it.”

CUPPING

Mario Fernandez is an expert “cupper” who comes from a line of Mexican coffee- growers dating back to the 1830s. Fernandez came to Yemen to contribute to two indispensable elements necessary in order for the nation’s coffee trade to prosper: his ancient art and to consult on an international grading system for natural coffees. “Cupping” is a sensory analysis of coffee utilizing the tongue and mouth to identify whether a cup of coffee is good or bad. His presence was timely: “The public needs to be educated about how to prepare coffee,” Fernandez said. “Until last week no one in Yemen knew how to cup.” The cuppers are typically buyers or suppliers of coffee.

David Roche, the technical director for the Coffee Quality Institute based in Long Beach, California, explained further: “It’s a slurping technique,” he said. “You vaporize the flavors in your mouth and have an instant reaction. You take note of that specific technique for evaluating coffee. Any country can claim they have the best coffee; there is good and bad in all countries.”

The conference was Roche’s second trip to Yemen. Previously, he visited the coffee farms for a first-hand look when he came to the country to teach cupping. He told The Media Line that, “Yemen coffee is unique and has always been high priced. Yemen’s biggest problem is quantity. They fell to almost one-third of their production level of 15 years ago in part because of the better price of other crops such as Qat; the price of coffee on the world market; and the shortage of healthy trees in fields. [In Yemen] the farmers grow it on roof tops and sometimes store it in caves for years. They also need to understand what the consumer wants. Our role is in standardizing the coffee.”

The reference to “naturals” means the whole coffee bean is picked and dried with the skin on it. The opposite is “washed,” which one coffee producer described as “the difference between red wine and white wine.”

Yet, there is currently no world-wide system for grading naturals. The “Q System,” implemented by the Coffee Association of America and The Coffee Quality Institute, is geared for top quality coffees and specialty coffees; and not applicable beyond the top ten per cent of the world’s coffees.

Of the 18,000 tons of coffee it produces annually, Yemen only exports 4,000 – 6,000 tons, the rest being consumed by Yemenis. That figure is growing, with coffee houses springing up seemingly everywhere, but remains small when compared to Columbia or Brazil, each exporting hundreds of thousands of tons annually. The largest importers of Yemen’s coffee are Saudi Arabia and the Gulf States, along with the United States. Europe and Japan follow.

In the United States, roughly half the population – an estimated 150 million Americans — consumes some type of coffee. World-wide, coffee is a $16 billion industry – the second-most traded commodity after petroleum. In 2011, about 135 million 60 kilogram (132 pound) bags of coffee will be produced – some 1.7 billion pounds of coffee.

A stop at The Coffee Trader revealed a mix of societies melding around coffee. Dressed in Western-style clothing but wearing a jelbab covering, Susan Coleman, the Wisconsin expatriate who is co-owns the Sana’a café and coffee store stayed busy serving customers. Featuring U.S.-style service and decked-out with Christmas ornaments, the café’s ambiance is distinctly American – until you notice that some of the men are dressed in traditional Yemeni clothing and some of the young women working on their laptops are garbed in floor-length jelbabs, sipping their coffee through a narrow slit in the veil.

Meanwhile, at the conference, the coffee competition was the final event. Q-certified cuppers from around the world tasted and rated fruity, spicy and chocolaty coffees. Yemen’s own coffee – featuring a tinge of chocolate and raisin — took second place to Tanzania’s blueberry and fresh fruit flavors. Ethiopia came in third place.

Qaid told The Media Line that one of the conference’s successes is that SMEPS has been commissioned to prepare a report with recommendations for developing Yemen’s coffee sector — including plans for a coffee fund with buy-ins from farmer groups — that will be presented to the government in March 2011, with Yemen poised to enter the International Coffee Organization. Also coming from the conference is newfound hope that the coffee market will become more balanced as sun dried coffees continue to gain international exposure and new cupping procedures for them have now been introduced.

David Roche shared the optimism for his Yemeni hosts. “Change in Yemen will take a decade,” he told The Media Line. “But sophisticated drinkers who buy whole bean coffee will buy Yemini coffee and they’ll pay more for it. It’s boutique,” he said.

Qaid agreed. “Yemini coffee is experiencing a renaissance. New coffee shops are popping up all over the place. Young Yeminis are learning the skills of coffee,” he said.

Asked which his own favorite coffee is, he replied “ancient Typica from Haraz.” In Yemen, of course.

Written by Felice Friedson

December 12, 2010 – Bell Helicopter was awarded a $27M contract to provide the Yemen government with a comprehensive mission package to support military requirements. The package includes four commercially designated Huey II aircraft, pilot and maintenance training, spares, special tooling and dedicated service representatives.

“This contract award is the result of a true team effort,” said John L. Garrison, Bell Helicopter president and chief executive officer. “We are delighted to partner with AMCOM, DCAA and DCMA to provide the Yemen Government with aircraft and support that not only adds value to their mission, but are expected to be delivered ahead of schedule.”

Initial requirements for the contract were identified in early January, culminating with contract award in late September 2010. All four aircraft are complete and supporting training activities at Bell’s Customer Center.

The aircraft are expected to deliver in January 2011 and will be operational less than one year from when the initial requirements were identified. Spares and tools have already been shipped to support the operation.

“Built on the foundation of proven reliability, the Huey II delivers increased mission capabilities and the performance enhancements needed to ensure the success of the Yemen Government’s mission requirements,” said Larry Roberts, senior vice president commercial business.

Based on the proven Bell UH-1H helicopter, the Huey II configuration adds a more powerful engine, new dynamic components and tailboom, a new navigation and communication suite, and complete rewiring to an existing hull; significantly increasing in hover performance and gross weight, while lowering direct operating costs.

Bell’s industry leading Customer Support and Service organization will also provide training for 12 Yemen pilots and 32 Yemen maintenance technicians as well as a dedicated team of support representatives including a pilot and maintenance technicians to help start the operation.

“At Bell Helicopter, we aren’t just selling aircraft, we are working with our customers to provide complete aircraft and support solutions necessary to meet their missions. This contract is testament to that commitment,” said Garrison.

Bell Helicopter, a wholly owned subsidiary of Textron Inc., is an industry-leading producer of commercial and military, manned and unmanned vertical lift aircraft and the pioneer of the revolutionary tilt rotor aircraft. Globally recognized for world-class customer service, innovation and superior quality, Bell’s global workforce serves customers flying Bell aircraft in more than 120 countries.

A unit of Mubadala Development Company, the Abu Dhabi investment fund, on Sunday signed an agreement with Yemen Company for Investments in Oil & Minerals (YICOM) for the exploration and production of oil and gas in Yemen.

Under the terms of the deal, Mubadala Oil & Gas and YICOM will assess opportunities for new investments, field redevelopment and expansion projects in Yemen, the company said in an emailed statement.

“The Yemeni government has created an attractive investment environment in the upstream sector and we believe Mubadala can use its ability to act as a powerful catalyst, working with YICOM, to open up new oil and gas opportunities in Yemen,” said Suhail Al Mazrouei, deputy chief executive officer, Mubadala Oil & Gas.

Mubadala Oil & Gas’s existing projects in the Middle East, Africa and Asia currently produce around 400,000 barrels of oil per day.

PSN Emirates, a subsidiary of Mubadala, announced plans last month to establish joint ventures in all Gulf states by the first quarter of 2011, as it targets projects worth $1.7bn.

CEO David Clark said joint ventures in Saudi Arabia, Kuwait and Oman are in advanced stages and are likely to be operational early next year.

“The market potential is huge in the Gulf. We are actively bidding in these markets and would like to have an on-the-ground presence,” Clark said.

PSN is executing projects worth $3.1bn worldwide currently and is eying projects in Iraq and Yemen, he said.

SANAA, November 7 (Reuters) – Yemen LNG, a liquefied natural gas venture led by French oil major Total (TOTF.PA: Quote), will divert 35 cargoes originally meant for U.S. markets to Asia next year because of higher prices there, an official said on Sunday.

Income from gas exports is an important revenue source for the impoverished country, a neighbour to top oil exporter Saudi Arabia but without its vast resources, as the Arabian Peninsula state struggles to make up for falling crude revenues.

Yemen is under pressure from Washington to crack down on al Qaeda militants who claimed responsibility for bomb packages sent on planes bound for the United States last month. Militants have sometimes targeted Yemen’s energy industry.

“Today our strategy at Yemen LNG is to exploit the difference of prices between the U.S. and Asia, and to deliver to Asia the cargoes which were originally meant to be delivered in the U.S. to enjoy better price,” Francois Rafin, general manager of Yemen LNG, told a news conference in Sanaa.

He said the company’s production of LNG would increase from 5 million metric tonnes to 6.55 million metric tonnes in 2011.

“We are now planning to divert 30 per cent of the 6.55 million metric tones to be produced during the next year. That is 35 cargoes,” Rafin said.

He said the company has already diverted 25 cargoes to Asia out of 85 shipped this year from its plant at the Arabian Sea port of Balhaf.

LNG demand in the United States, which was expected to be a major importer, has fallen due to massive increases in domestic supply from shale gas. [ID:nN26122191]

“The growth in Asia continues to be very strong, the appetite for clean fuel is there,” Rafin said.

Yemen started the production of LNG from the Balhaf plant in October last year.

The $4.5 billion LNG project is the largest-ever industrial project in Yemen, a small non-OPEC oil producer that pumps around 290,000 barrels of crude oil per day.

Rafin said the company shipped gas this year to the United States, China, Japan, Korea, India, Spain, Mexico Chili and Kuwait.

Path Solutions, provider of Islamic banking software solutions, announced that Shamil Bank of Yemen and Bahrain (“SBYB”), the third largest Islamic bank in Yemen, with a fully paid capital of 6bn Yemeni Riyals, has gone live with Path Solutions’ iMAL Islamic core banking suite.

SBYB is focused on expanding the range of Islamic products available to retail and corporate customers and improving the level of customer experience. “We want to position ourselves as a leading provider of innovative products and customer-friendly Islamic banking services in Yemen”, said Saeed Bazara, General Manager of SBYB.

“Deployment of effective technology is a key element in enabling SBYB to deliver first-class banking services to its privileged clientele. We have been working closely with Path Solutions’ project team to ensure a smooth transition from our bank’s systems to iMAL, which we believe will address the challenges of real-time availability, scalability, improved time to market and enhanced modern banking services to our customers”, Bazara confirmed.

SBYB has officially gone live on Saturday the 2nd of October, after turning off its old systems. The decision was taken after 2 successful weeks of parallel run. The delivery channel implementation consisted of 10 branches, 5 decentralized using iMAL*Safe and 5 others centralized connected directly to the HO.

“Path Solutions is proud to be the trusted strategic IT partner to SBYB, and this is a significant step towards consolidating our success in the highly challenging Yemeni Islamic banking market”, said Alain Abou Khalil, VP Professional Services at Path Solutions. “The project is part of a modernization program for SBYB, and includes the deployment of a complete front-to-back-office solution with full branch automation, as well as trade finance, fixed assets, financial reporting, SWIFT messaging and e-banking modules. The system was delivered using Sun servers”.

SBYB is now benefiting from the most advanced Islamic banking solution available on the market. With Path Solutions’ iMAL, the bank has greatly enhanced its ability to process trade finance transactions and grow its trade business as well as improve its local compliance and performance management capabilities.

SBYB is now able to continue its expansion without the disruption that is normally associated with new systems deployment.

Oct. 3 (Bloomberg) — Yemen’s Ministry of Oil and Minerals said three companies won the bidding of oil and exploration concession in three blocks, the state-run Saba news agency reported.

Norway’s DNO International ASA won the bidding in block 48, Austria’s OMV AG was awarded block 86, while Total SA of France won the concession in block 85, Oil Minister Amir al-Aidarous announced at a news conference today in Sana’a, Saba said.

The ministry is still negotiating the conditions and scale of exploration in two other blocks, 55 and 80, after the completion of offers by two unidentified companies, Saba said.

Yemen’s Ministry of Oil and Minerals has just revealed that it will announce the 5th bidding round offering 10 oil and gas exploration blocks at the 3rd International Yemen Oil, Gas and Minerals Conference.

The Ministry will also announce 10 investment opportunities across the mineral sector.

In recent years, the Yemeni government has been actively pursuing plans to encourage foreign investment in the Republic’s oil, gas refining, petrochemical and mineral sector.

Presented under the Auspices of H.E. Ali Abdullah Saleh, Presdient of the Republic of Yemen, the 3rd International Yemen Oil, Gas and Minerals Conference is a major part of the Government’s strategic initiatives to encourage economic stimulus. Major governmental decision makers from key departments and Ministries will deliver presentations, reveal new initiatives and international cooperatives, announce new projects and deliver the latest incentives in PSAs.

Acting as a catalyst for building long-term business partnerships in this lucrative economy, the Minister of Oil and Minerals, Ameer S. Al-Aidaroos will outline new onshore and offshore projects and investment opportunities, which include new incentives for the international private sector to enable the future growth of Yemen’s Oil, Gas, Petrochemical and Mining Sector.

Further Ministerial and key governmental officials, as well as leading international oil companies including, H.E. Ali Muhammad Mujawwar, Prime Minister, Abdul-Karim al-Arhabi, Deputy Prime Minister and Minister of Planning and International Cooperation, Awadh Said Al SOcotri, Minister of Electricity and the Chairman of the General Investment Authority, Salah Al Attar will unveil their strategy for attracting more international investment.

Announcing the latest incentives in Production Sharing Agreements, the Ministers will showcase the government’s plan for enhancing transparency by making data for open blocks more readily available, as well as the free transfer of funding and revenues into and out of the country. Streamlining the tendering process and enabling a fast track for the validation procedures of the PSAs is also on the agenda.

“The forthcoming forum will create favourable conditions for the development and strengthening of beneficial cooperation between the Republic of Yeme the leading International companies for efficient exchange of experience and definition of new investment opportunities,”

said Al-Aidaroos in a support letter issued by the Minister of Oil and Minerals office earlier this month.

The 3rd International Yemen Oil, Gas and Minerals Conference, presented under the Auspices of H.E. Ali Abdullah Saleh, President of the Republic of Yemen will take place at the Movenpick Hotel in Sana’a, Yemen on 18 – 19 October 2010.