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Historical Brief
Yemen Petroleum Company: A leader among Yemen’s public sector companies
During the time before the
blessed unity of our nation, two companies existed in both parts of the
country. In the former (northern) Yemen Arab Republic, the company was
called the Yemen Mahroogat Company. This company owned exclusive rights
to sell all petroleum derivative products by means of importing them
from neighboring countries. This allowed the company to play a big role
in vitalizing the national economy. It was established in the Hijri
month of Jumad (First) in the year 1380 Hijri (June 1960) as a result
of insistent requests from various large business owners on the
important need to establish a quasi public/private company that would
take the place of the foreign agency that used to import Yemen’s
Kerosene and Benzene needs. The company was then established with a
decree from the oppressive ruling regime as a Yemeni share company
called Yemen Mahroogat Company. At that time, the functions of this
company were focused upon importing kerosene and small quantities of
benzene and diesel, the quantities of which were based entirely on the
consumptions of the ruling family. The reason for this is that during
the pre-revolution era, the dominant means of transportation was animal
based, and very few automobiles were used then. In addition, farming
and agriculture equipment were very primitive, so mainly animals and
plows were used at that time. Therefore, considering the circumstances
of that time, the requirements were primarily restricted to kerosene.
The
company was established with a capital of 836,000 Mary Theresa Riyals,
divided between 167,320 shares, each share worth 5 Riyals. And with
this, the company was established with a capital sufficient to the
economic situation and the local demand of the time.
After the
revolution of 1962, a Republican Decree was issued to restructure the
company’s Board of Directors, and an opening for public share buying to
enable for strengthening it to face newer burdens and responsibilities.
The company’s capital was raised to 2 million Riyals in 1964 then to 5
million in 1969 (only 2 million of which was paid). In 1965 the
Cooperative Foundation for Petroleum entered as a partner with 49%
share of overall capital, and the Yemeni side maintained the 51% share.
In June 30 1968, the company became Yemeni owned 100%, where the
Government side (Ministry of the Economy) owned 49%, and the Yemeni
Bank for Structuring and Development owned 51%. In 1970, the capital
became 5 million Riyals and went up to 10 million Riyals in 1973 to
better cope with the rising development in agriculture, industry, and
socially across the country.
As for the People’s Democratic
Republic of Yemen (the former southern part of the country), a company
was established to market the petroleum products in the 1950’s as an
affiliate company for Shell Corporation, which was then called Red Sea
Shell Company, Limited. Its name was then changed to Aden Shell
Company, Limited, and after public takeover in 1969 resulting from the
14 of October revolution, the name was changed to the National
Petroleum Company. And on the glorious 22nd day of the month of May in
the year 1990, the day that realized the dream of all the people of
Yemen, the Cabinet Decree number 191 was issued stating that the two
companies be merged into one company to be named the Yemen Petroleum
Company (YPC) with a new logo, that of the National Petroleum Company.
And the Cabinet Decree defined the main functions for this company
directed towards the execution of the Nations general policies in the
field of marketing transportation and storage of petroleum products and
lubricants.
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