Economy

Calgary-based oil producer Calvalley taking no chances in Yemen

Calgary-based oil producer Calvalley Petroleum Inc. isn’t taking any chances when it comes to protecting its people and production in Yemen.

The Middle Eastern nation has been dealing with an increase in violence lately, stemming from infighting between ethnic groups, which was in an area already known as a hot bed for Al Qaeda activity.  It’s government and heads of state resigned last week leaving no one in charge.

Calvalley’s operations are currently in a desert, away from any of the fighting, life in the capital of Sanaa however is a different story.

“We’ve had to adjust to the changing situation and security issues within Yemen,” said Chief Financial Officer Gerry Elms. “One of the major issues back in 2013 was the army shot the local sheik where our operations are, that resulted in a complete shut down to our drilling operations because we have no access to any services. We are producing right now from our existing wells and maintaining production and we’ve been successful at doing that for the last six months.”

Elms says they’ve had some issues with trucking the product and as a result have had to change their port of operations to the Red Sea.

“I was in Yemen in July, in Sanaa and the Houthi rebels were 15 kilometres north of the city,” he said. “Since then, on September the 21st, 2014, the Houthis basically came in and took over Sanaa and that’s resulting in a fair amount of violence in the capital. We don’t have a lot of issues around our production operations, certainly in Sanaa it didn’t feel very safe.”

He tells 660News they’ve had to take extra precautions given the current political climate.

“We have an armoured vehicle, we have military escorts to and from the airport but even in that situation you still get stopped at check points along the way and it is a bit concerning that anything can happen at any time,” said Elms.

When Calvalley first started drilling in the desert there were no inhabitants near their wells, since then it’s built up to a degree.

The company has only one Canadian working in the Middle East, much of its workforce is Yemeni.

“The Yemenis have been used to a lot of security, government officials have been attacked, the Filipino government has asked all of its nationals to get out of Yemen, the American embassy has closed its operation to the public but the Yemeni people all seem to deal with it on a day to day basis,” he said. “In terms of our operations, we have full military support, we have two armed brigades that support our operation and that solves that issue.”

The C.F.O. says it’s mainly their people in the capital that are dealing with the changing environment.

“Basically security is our major issue, it’s difficult for us to get qualified people but we can still continue our operation and we have committed people that still go in and run the operation for us.”

To date there have been no major flare-ups and Elms says it would be nice to solve some of their government issues but for the moment, there is no government in Yemen.

660 News

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