More Than Just Pumping Oil

HOW THE OIL BUSINESS HAS TO PLAY ON SEVERAL LEVELS

Being one of the world’s major oil companies means a lot more than only pumping oil and selling it for a good price. The awareness of the huge responsibility of such companies has grown during recent years on both sides: the consumers and the companies. The oil giants understand that there is on one hand the business and on the other hand the care of the environment, as well as the social and economic development of the countries where they are operating. The French company TOTAL gave us an insight into its activities in Yemen. This article overviews many aspects of TOTAL’s subsidiary, TOTAL Exploration and Production Yemen (TEPY), from oil production to the numerous development projects, and has several supporting interviews with local and foreign employees in order to complete the portrait of the biggest foreign investor in Yemen.

TOTAL’s work is focused in Block 10, where it has plans to allocate $1 billion for new investments over the coming two to three years. Martin Deffontaines, general manager of TOTAL E&P Yemen, describes the new investment allocation by saying that “it has been our belief in the potential of Yemen that we have allocated this new investment on Block 10. I think we have succeeded to become a strategic partner with both the government and the people of Yemen. We always strive to be accepted in our host countries over the long term. Our performance at both levels of developing the petroleum industry and advancing sustainable development programs will, I hope, help us enjoy a long-term presence in Yemen.”

Speaking with TEPY’s employees about the prospective and the role of the company in Yemen suggests a promising future. “With its activities in two oil producing blocks and three exploration blocks, not to mention its involvement as the lead partner in the multibillion dollar YLNG project, TOTAL can certainly be categorized both as an economic and long-term partner of the government and people of Yemen. TOTAL is sensitive to the needs of Yemen both at the local as well as the national level, as demonstrated by our initiatives and projects at all levels,” said the business development manager in Sana’a, Sangkaran Ratnam.

TEPY has adopted a number of environment-friendly initiatives. One of these initiatives concerns the utilization of gas produced on Block 10 in association with the production of oil from the basement reservoir towards power generation projects. TEPY understands the importance of maintaining a clean environment while operating. Further, TEPY understands more how important it is to help the government meet the power generation shortfalls in the region, and signed a Memorandum of Understanding with the Ministry of Oil and Minerals (MOM) and the Ministry of Electricity and Energy (MEE) in July 2008 to launch the study and construction of power generation facilities that are able to utilize the surplus of gas associated with oil production on Block 10.

In late 2008 TEPY commenced the construction of a gas supply pipeline and receiving facilities that will support a temporary power plant being installed by the Public Electricity Corporation (PEC) of Yemen. The 25MW facility is almost complete. Powered by gas from Block 10, it is intended to supply the region with electricity. TEPY is also assisting the MEE/MOM in studies towards a permanent power plant by MEE/PEC for the region. 

In addition, studies are already underway for a permanent power plant to be constructed by TEPY in order to cover the power needs on Block 10. TOTAL has also proposed to supply gas for power generation needs in other surrounding blocks. With these projects not only will the supply of electricity to the region and Block 10 be improved, but also TOTAL’s global environmental performance. “Burning gas is burning money and the headquarters in Paris wouldn’t have given us the approval to explore for more oil if we hadn’t found a good solution for using this gas. Furthermore the greenhouse gas emissions are avoided at the same time,” explained Hans Huisjman, TOTAL site manager. 

Good results and well-prepared projects also require employing the best people at the right time. Block 10 employs around 3,500 people. The real and interesting challenge that the company is involved in is “Yemenization,” the transfer of know-how to the Yemeni nationals through staff training sessions and an on-the-job-training program. For the moment, TEPY’s target is for 90 percent of its staff to be “Yemenized” in compliance with the regulations of the Ministry of Oil and Minerals. Even if the knowledge transfer takes some time, it is very important to have quality staff and to train them well. It seems to be the right way to offer to the Yemenis not only many jobs but also key positions in the company.  Hussein Aziz recently became the first Yemeni Production Superintendent on Block 10.

“I started from 2000 to 2002 as a trainee in TOTAL; during this period I had the opportunity to visit TOTAL affiliate in Indonesia and the headquarters in Paris. Attending extensive courses and special courses to improve my technical knowledge was very useful. My first job in Sana’a was then as a production engineer, followed by production project engineer and afterwards well production engineer. In 2004, I was relocated on site as production engineer and then in 2007 as a production coordinator. At the moment I’m a production superintendent. All I still wish is maybe to work one day in another TOTAL affiliate.”

Nageeb Ibrahim, the head of Public Relations, who seems thrilled to be part of the team at TOTAL, says “I take pride in belonging to a petroleum giant like TOTAL; I feel happy being an employee in TOTAL that has promoted the investment climate in my country by being the first major foreign investor in Yemen. What I like most as a national employee is the approach TOTAL has steadily and effectively followed to further go beyond mere industrial relations in order to broaden very noticeably its contributions to the national economy, the social life, and the overall development efforts in my country.”

Nagwan Al-Guneid joined TEPY in March 2008 as the head of the internal communication and scholarship program. “In one way or another, TOTAL has reached many Yemeni people, either through employment or through sustainable development initiatives or through educational activities and sponsorships, which obviously has made a reputable presence here. With careful listening and understanding of the local context, I see TOTAL playing a strong leading role among other oil and gas companies in Yemen.”

This statement describes perfectly the actual involvement of TEPY in the development of the country. An approach has been launched in all of TOTAL with numerous projects on three different levels: environment, local content, and society. The environment needs to be taken care of, and TOTAL’s initiative of gas-fuelled power and reduction of greenhouse emissions is a good example of how it is always keen to have environmentally-friendly operations. The local content includes the projects which do not only aim to contribute to local development but also to encourage local business and companies. For instance, a water bottling factory that is based in Sah District has been hired by TOTAL to deliver drinking water to Block 10, an effort which means less transportation and more efficient service. 

The third and biggest part, the so-called society, is meant to assist the community through diverse initiatives. Just one example, among many, is TEPY’s initiative to collaborate with the local NGO, Dar Ibn Khaldoun, in order to help the poorest families. The project includes lending goats to hundreds of poor families. The families can keep the production of these goats and are required to gradually give back the goats for use by other needy families. “I agree, it sounds quite surprising that an oil company is helping people getting goats, but this is what people need in the region. The societal part is similar to the work of an NGO. 

We prefer to manage our projects’ funds through the Local Development Committee that includes the Ministry of Oil and Minerals representative, local authorities and all local stakeholders’ representatives,” explains the Sustainable Development Advisor René Buttin. TOTAL established the Local Development Committee in 2008 to support and follow up the implementation of the company’s sustainable development activities around Block 10. 

Pursuing this sustainable development policy has been a real salvation for the people in the region after the floods of October, 2008. The disaster uprooted more than 450,000 palm trees in the region, destroyed farmland, killed cattle, destroyed houses and water wells, and cost lives as well.

In addition to the immediate assistance and aid that was provided during and after floods, TEPY and its Block 10 partners--Occidental, Sinochem, and Kufpec--have contracted with the NGO Triangle, a huge project in four phases, in order to restore the damaged agriculture in Wadi Sah, which is located in the area of Block 10. The first phase, already finished, included the cleaning of the damaged areas and the removing of around 30,000 dead palm trees, the levelling of 225 hectares of cultivated land so that they could be ready to be planted again, restoring and maintaining the irrigation structures and canals and restoring partially the Wadi bed in Sah upstream. The initiative was also taken to excavate and clean one of the most important irrigation systems of the region, the Abdulraheem canal. Built about four centuries ago, this canal is about ten kilometres long and is meant to supply with water during the rain season about 400,000 palm trees and 1,000 hectares of fields. 

Pursuing this sustainable development policy has been a real salvation for the people in the region

The second phase, which began on June 1, 2009, includes the reinforcement of the canal structures, the reconstruction of a dam, and the building of a discharging water system in order to avoid other damages when there is too much water in the canal.

The third phase will be the rehabilitation of the wells. In between 50 to 80 wells were found damaged and around 40 of them can still be restored, either completely with new equipment or partially because they were less damaged. 

The fourth and last phase aims to help the families who lost nearly everything. Counting the losses alone in Wadi Sah, 18,000 sheep and about 2,000 camels died. Block 10 partners have planned the distribution of cattle to meet the needs of those local people who have lost their cattle during the floods. 

Giving such assistance to so many affected people has required a collaboration between TEPY and its partners, NGO Triangle and the Local Development Committee, in order to identify the people who are in need. 

“Thanks to this collaboration, the fields which were washed away are restored and planted again and a good harvest is in view. The people from the Block 10 were the first who arrived here after the flood. They came by foot to see where and if they could help. I think everyone in the village of Sah will remember that moment and the devotion of TOTAL’s employees” says Hussein Bin Alsheikh Abu Baker, the agriculture advisor of Sah.

Pursuing this sustainable development policy has been a real salvation for the people in the region 

TOTAL has of course gone further to respond to needs in other development areas. These include, for example, sponsorship for sports and cultural activities, internal and external scholarship programs, healthcare projects and women’s life improvement initiatives.

One of the pillars in TEPY’s initiatives has always been education. In collaboration with Al-Irtiqa Women Association, the Human Development Centre was established in Sah District in 2007 for developing local employment. This center receives women in the morning and is open for men in the afternoon. Around eighty women and fifty men now have access to new fields of education for developing social and professional skills such as traditional handicrafts, computing and training in foreign languages. A special training program has been developed also to help people gain access to micro-finance and learn how to manage their small businesses.

The big challenge remains the education of the youth, the future of the country. For those reasons, TEPY introduced two years ago a scholarship program which allows twelve students, six girls and six boys, to receive a scholarship in Yemeni universities. The number of students receiving such scholarships will gradually be raised to forty-eight in 2010. Furthermore, an international scholarship program was also launched in 2008, with TOTAL funding ten students’ university education in France and Britain.

“The time is over now where oil and gas companies were drilling, producing and leaving. TOTAL did understand very well that to build a solid relationship with the host country you have to listen the people around you and be prepared to go beyond your core industrial activity, respecting the local people and environment.’’ concluded Martin Deffontaines, general manager of TOTAL E&P Yemen. ■