In view of the Constitution of the
Republic of Yemen
Republican Decree No. (3)/2004
concerning the Council of Ministers
Republican Decree No. (8)/2006
concerning the formation of the Council of Ministers
Republican Decree No. (40)/2000
concerning the Organizational Regulation of the Ministry
Republican Decree No. (204)/1997
concerning the foundation a Petroleum Exploration and
in accordance with the proposal
forwarded by the Minister of Oil and Minerals
and after the approval of the Council
The Prime Minister gave his decision
Operational Definitions and Objectives
This shall be called Organizational Regulation of the
International Competitive Bidding’s Procedures on Open
Exploration Oil Blocks”.
The following words and expressions shall have the designated
meaning against each one unless the context dictates
The Republic of Yemen
The Higher Council for Investment, Oil and Economic
the Government of the
of Yemen as defined in the Yemeni Constitution;
\the ministry of oil and minerals (MOM);
the minister of oil and minerals
the Petroleum Exploration and Production Authority (
The Committee :
A Committee is formed by the Oil Minister to carry out
procedures covering the international competition as
stipulated by the Regulation.
The Phases of Competition Procedures
Invitation(s) to bid shall be advertised and shall define the
procedures and requirements for competition. Competitive
stages and relevant schedules shall also be defined as
First: Advertising and Receipt of Applications:
An advertisement shall be published in specialized domestic
and international media which are approved by the Committee
as well as an Electronic Ad on PEPA Site. The advertisement
shall last for 3 to 6 months.
Second: Pre-Qualification Phase
All applications or offers shall be received from all
applicant companies and such offers would be
considered and dealt with in not more than a period of a
Third: Accessibility Phase
All initially qualified companies shall be advised of the
date and time to have an access to data and information of the
expected blocks in the Data Rooms. This procedure will take an
event for 3-4 months.
Fourth: Giving Out “Standard Offering Forms” to Competitors
An official meeting shall be held together with all
representatives of companies who will be granted the
opportunity to have access to view blocks data who are
initially qualified. The purpose is to hand the initially
qualified companies’ representatives “Standard Offering Forms”
and the draft contract. This shall last for a period of three
weeks from the last day of the access stage.
Fifth: Reception Phase
A period of thirty days following the official meeting’s date
will be given to receive the bids in sealed envelopes. No bid
shall be accepted after
Sana’a time. Therefore envelopes shall be opened the day
following the receipt deadline.
Fifth: Offer/Bid Evaluation, Comparison and Analysis
Envelopes shall be opened and the data of each
offer shall be input into a special table. Bids/offers shall
be analyzed within a month from the date of opening..
Sixth: Advertising Competition Results
The names of winning bidders shall be advertised
in all different media along with forwarding letters of award
to the winners within a week from the Minister’s approval of
the results of bid analysis.
Requirements and Conditions for Participation in the Competition
and Initial Qualification
Applicant Companies shall attach to the "Application Form" all
required documents which prove their experience, technical and
financial potentials in accordance with the Regulation. Such
documents shall include the following:
Article of Association
Annual ( Financial and Technical)
Report of the applicant company accredited by the auditor;
such report shall cover two years prior to the year of
entering the competition; all documents shall be accredited
and documented as origins;
The Board of Directors’ Decision shall
be attached If the applicant is the parent company; otherwise,
the applicant company shall attach the approval of the parent
company to enter the competition, its acceptance to all
expected agreements and contracts in this respect. Another
document is that showing the status of the affiliated company.
Details of applicant company profile
shall be presented by completing the application form and
stamping it ( use the application form given out by the MOM).
Applicant Company must clarify any
legal actions/charges or law suits for/against it, if
All documents must be documented and
To participate in the international competitive bidding, applicant
company(s) shall present a “Bid Bond” with a value not less
than fifty thousand US Dollars (Bid Bound) in PEPA account.
This guarantee shall be in the form of a Letter of Credit or a
payable check from a domestic bank. Noteworthy, the guarantee
shall be valid for at least six months from the deadline of
acceptance to enter the competition, that is, following the
ending of the first stage. Where as to ensure the completion
of the competition procedures and in case of company/companies
considered unsuccessful a guarantee is refundable as dictated
by Article 25 of the Regulation.
A Company /Companies (individually and/or collectively) shall
be considered initially qualified to compete if it/they
fulfill the following:
Experience: If the company/companies
possess sufficient technical experience to operate and run oil
blocks according to the basics of international oil industry.
Financial Potentials: If the company
possess the financial capacity to pay a capital not less than
Environmental Record: If the
company/companies enjoys a very good environmental record;
II): If the company/companies do not have any of the above
conditions, then it is considered initially unqualified and
shall be informed formerly of the qualification result.
A Company consortium is qualified if it fulfills the above
mentioned conditions and data requirements and provided that
one of the members be an operator fulfilling the operational
conditions as stipulated by the Regulation. Thus, the
agreement and the declaration documents among the consortium
members shall be submitted too.
Companies owned by individuals or general companies (registered in
the world stock markets) shall fulfill and meet the conditions
of the Regulation and shall be an operator itself/themselves.
Companies with no operational experience in oil operations shall
not be accepted unless they have operation partner(s).
Investment companies owned by an individual(s) shall apply along
with a competent operator fulfilling the relevant conditions
of the Regulation and the operation agreement between them
shall be attached to the application form.
The PEPA shall inform the initially qualified companies with the
results of (technical and financial) initial qualification
formally after the Minister has given his approval of the
The Committee shall define a schedule for the initially qualified
companies to have an access to view data and information.
Initially qualified companies will be informed of that.
The Committee will define the minimum technical and financial
obligations required for each block individually in the bid
forms according to the criteria stipulated by the Regulation.
These bids shall be distributed to initially qualified
companies along with the MOM’s sample agreement; such
"Offering Forms" must include the following:
Percentages of sharing oil.
exploratory periods and the minimum
level of financial and technical obligations.
percentage of cost oil and components
for cost recovery.
the Ministry Royalty share.
social Development bonus.
scientific research contribution.
Data Bank Development Project
Companies shall submit their offers/bids in sealed envelopes
along with a banking guarantee from one of the domestic banks.
Such guarantee shall be at least an amount equaling 3% out of
the total costs of the first exploratory phase as defined in
the bid(s) and the guarantee, being irrevocable, shall be in
the name of the PEPA in the form of a Letter of Credit or a
payable check from a domestic bank ensuring the guarantee
shall be valid for at least six months from the final
deadline. This shall be for the sake of completing the
procedures to sign the agreement.
The above guarantee shall be refunded
to the company two weeks following the final signing of the
agreement and as soon as the signature bonus is paid.
The above guarantee shall be taken by
the PEPA if the company did not follow the completion of
negotiations and signing procedures of the agreement in the
date defined by the MOM without having to go through other
Bid opening shall be carried out at the defined date.
The Committee shall make a bid opening
minutes, jot down every bid’s information in a special table
at the same meeting. It shall take into account the complete
confidentiality of each bid’s information.
All Committee members as well as other
assistants shall sign the minutes and data tables; then all of
that shall be endorsed by the Minister.
All bids shall include all economic and technical status of the
applicant companies in accordance with the Standard Form for
that purpose. The Form shall incorporate the least required
conditions and shall be signed by the individual/individuals
representing the applicant company(s) and endorsed as
As defined by the bid form handed to initially qualified companies,
any bid lacking the least conditions shall not be considered.
At the final
signing of the draft agreement, the 3% guarantee shall be
refunded to the company provided that the company has given a
guarantee for the signature bonus specified in the bid of the
company for any competed block/blocks
PEPA have the right to withdraw the initial guarantee , the
fifty thousand US Dollars, defined in Article (5) without
having to resort to any legal procedures; this shall be in the
if the applicant company retreats
before the declaration of the results of initial
If the company does not submit its
offer in the specified date, that is, before the final
if the company does not submit the 3%
guarantee or increase the initial guarantee ( the $50
thousand) to equal the value of 3% guarantee or either one;
The Ministry have the right to reject any offer or bid without
giving any reasons for such rejection.