Oil Companies File Arbitration Against Yemen

Two United States oil companies, taking an unusual tack, filed arbitration proceedings this week against the government of Yemen for expropriating an oil-producing block with output worth more than $1 billion a year.

A venture owned by the Hunt Oil Company and Exxon Mobil sought arbitration before the International Chamber of Commerce in Paris, a rare instance of oil companies taking action in an international forum against a sovereign nation.
Last week, the Yemeni government said that a government-owned company would replace the American companies’ venture, the Yemen Exploration and Production Company, or Y.E.P.C., as the operator of the area, known as Block 18.

“Unfortunately, Y.E.P.C. is now forced to respond to the Yemen government’s failure to honor the sanctity of our legal contract by filing this arbitration,” Ray L. Hunt, chief executive of Hunt Oil, said in a statement.

NY Times