Yemen Tries To Win International Oil Firms Back
There have been ‘positive indicators’ that international oil companies could resume activities and investments in Yemen, news outlet The New Arab reports, quoting a representative of the country’s exiled Saudi-backed government.
According to the Minister of Oil and Minerals, Seif Sharif, international oil firms were encouraged by signs of stability in Yemen’s oil provinces in Hadramout, Marib, and Shabwa in particular. These regions have shown that they have potentially large oil, gas and minerals reserves, The New Arab quoted Sharif as saying.
Yemen had proved reserves of oil totaling 3 billion barrels as of January 2014. That same year Yemen’s oil production averaged 127,000 bpd. However, the civil war that’s been raging for almost two years has forced nearly all production at Yemen’s oil and gas fields to be shut in, and oil majors have been shuttering projects there as hostilities and port blockades hampered security, production and exports.
In Yemen’s conflict, clashes between Shia and Sunni tribal formations heated up with the entrance on the scene of Iran – backing the Shia Houthi rebels – and Saudi Arabia – backing the elected pro-Saudi government now in exile – and evolved into an all-out proxy war between Saudi Arabia and Iran.
Last week, media reports said that Yemen may export later in January its first crude oil shipment since August, according to fixture list data showing that Glencore had booked an oil tanker to dock in Yemen on January 15.
Apart from the raging war that has led to humanitarian and fuel shortage crises, Yemen’s purely oil-connected problem is that its existing fields are close to maturity and in the absence of new oil discoveries, its crude reserves would be exhausted in less than a decade.
Although Yemen is not a major oil producer, especially compared to other Middle Eastern countries, its geographical location is strategic as it sits on the Bab el-Mandab strait, a key chokepoint in international shipping.
By Tsvetana Paraskova for Oilprice.com