Yemen's Performance on the Resource Governance Index
Yemen received a "weak" score of 43, ranking 37th out of 58 countries. A relatively high Institutional & Legal Setting score contrasted with "failing" performance on the Enabling Environment component.
(out of 58)
(out of 100)
|34||Institutional & Legal Setting||57|
|32||Safeguards & Quality Controls||52|
Institutional & Legal Setting (Rank: 34th/58, Score: 57/100) learn more
Yemen's "partial" score of 57 reflects clear systems for collecting payments from petroleum companies but an incomplete legal framework.
The Oil and Minerals Ministry regulates the sector, while the Petroleum Exploration and Production Authority grants rights and licenses. Licensing follows open and competitive bidding rounds, and companies ultimately sign production sharing contracts. All revenues from extractive companies are collected by the Finance Ministry and placed in the treasury.
Laws relating to the petroleum industry are publicly available, but include only general principles; implementation regulations, fiscal terms, and methods of assessing revenue are not defined. Environmental impact assessments are required but not published. The legislature passed a freedom of information law in 2012 but Yemen was suspended from the Extractive Industries Transparency Initiative in February 2013.
Reporting Practices (Rank: 31st/58, Score: 46/100) learn more
Yemen received a "weak" score of 46, the product of a lack of contract transparency and incomplete government reporting.
Licensing criteria are provided before bidding begins, and the Oil and Minerals Ministry publishes information about winning bids on its website. However, contract terms and other important license information are not disclosed.
The Finance Ministry publishes petroleum prices, the value of resource exports, costs of social investments, government share in production sharing contracts, special taxes, and bonuses. The Oil and Minerals Ministry regularly discloses similar information. The Petroleum Exploration and Production Authority publishes data on reserves, production by block, and the names of companies operating in the country, but not petroleum revenues. The central bank publishes production volumes, prices, oil and gas export values, the cost of subsidies, production stream values, and government share in production sharing contracts. The Parliamentary Committee for Development, Oil and Natural Resources publishes reports containing similar information, along with estimates of investment in exploration, block-by-block production data and costs, royalties, special taxes, and bonuses.
Safeguards & Quality Controls (Rank: 32nd/58, Score: 52/100) learn more
With relatively effective government monitoring but insufficient audit capabilities, Yemen received a "partial" score of 52.
Without legally-mandated fiscal terms, licensing officials have discretion when negotiating with petroleum companies. The legislature has significant oversight responsibilities; a parliamentary committee must approve petroleum contracts and may amend or terminate agreements. Final licensing decisions may be appealed through an arbitration process.
The Finance Ministry and the state auditor must review petroleum revenues, but often lack the capacity to do so effectively. Audit reports are to be presented to lawmakers and the president, but it is unclear whether this happens in practice. The reports are not publicly available.
Enabling Environment (Rank: 47th/58, Score: 16/100) learn more
Yemen performed poorly on global rankings of corruption control and democratic accountability, resulting in a "failing" score of 16.
State-Owned Companies (Rank: 25th/45, Score: 45/100) learn more
The Yemen Oil and Gas Company and its six affiliates are entirely state-owned. The company enters into joint ventures with foreign companies and provides subsidized fuel to the domestic market. Its only published report is from 2008 and contains information on reserves, production volumes, prices, the value of resource exports, the names of companies operating in Yemen, production data by block, subsidies, government share in production sharing contracts, and royalties; it does not provide financial balances. State-owned companies must be audited, but it is unclear whether these audits meet international standards.
Subnational Transfers (Rank: 29th/30, Score: 11/100) learn more
The central government transfers a portion of petroleum receipts to local authorities, but only after merging resource revenues with other fiscal income. Very little information is available on these payments, which do not appear to be linked to regional petroleum production.
INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
To explore all data and compare country scores, use the RGI Data Tool.
Key Economic Indicators
|GDP (constant 2011 international $ billion)||12.3||19.0||33.8|
|GDP per capita, PPP (constant 2005 international $)||2,120||2,236||2,060|
|Oil and gas revenues (% total government revenue)||67||63|
|Extractive exports (% total exports)||97||94||89|
|Sources: Oil and gas revenue as share of total government revenue from the Economist Intelligence Unit and the International Monetary Fund. All other data form the World Bank. Oil and gas revenues 2011 data from 2010.|