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Reality and future of Oil and Gas Prospects in Yemen

Date: 11/8/00
Time: 2:30:52 AM
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Reality and future of Oil and Gas Prospects in Yemen

Upon the Yemen unity on May22nd, 1990, oil projects in Yemen have developed and expanded up to an exiting character represented by the increasing number of oil firms operating in the territory and the exploring zones Yemen's oil return for the year 1996 almost reached one billion dollars. On comparison, it did not exceed 650 millions a year and half ago, and was only some 250 millions seven years back!

Such up-rise of oil returns has been due to factors, the most distinctive of which we enlist in this order:

- International price increases;

-Cost - price reductions by the oil firms operating in Yemen;

-Monitoring and control on the investment funds of the oil firms;

-Utilizing from the local employment pool;

-the role of our country in entering a partner in the capitals of some oil firm; and

-Maintaining of rights of sovereignty, the ratio of which may reach 40% of the production capacity.

Currently, the production of Yemen's crude -oil amounts 390,000bpd. By the end of 1997, it is estimated to reach half a million bpd, on counts of: - -An increases up to 30,000 bpd of the production capacity in Shabwa zone; -The initial production by Al-Namer company of up to 20,000 bpd, as per their expectations; and - The initial production by Candian -Occidental at an average level of 30,000 bpd from Kanhal field of Hadramout. The production in this field already started in three rigs, while inauguration of the operation shall be expected soon. The policy of the government in respect of oil extraction project-planning has extended in particular on accelerating the activities' performance, and putting emphasis on oil firms- Hunt and Canadian- Occidental in-particular- to double up the production rate by depreciating its planning periods to the lowest possible degree. Again, the policy made it possible to execute the biggest possible number of agreements with the European firms. Hence, in this context, there are by now twenty of them operating in Yemen. Lately, too, seven agreements have been already concluded. All such realities confirm a good future of oil in Yemen. As far as gas is concerned, this looks to stand as a new revenue resource of the national economy. Its export is expected by the year 2001, when hopefully something between 650-750 million dollars shall be poured to the country's budget. The first phase of gas production, which already started, involves the studies and technical designs. This shall conclude by June 1998. The second phase may consequently proceed by the construction and extension of the gas pipelines required for export purposes, together with establishment of the units and floor complexes. It shall, according to the scheduling, conclude by mid 2001, when 5.3 million tons of liquid gas would be annually exported.

Crude - Oil Marketing During 1996, an estimated quantity of 47,133,397 barrels of crude- oil has been exported, most of which been directed to the following destinations: China, Korea, Japan, Thailand, Brazil, South Africa and Singapore.

The total value of the exported quantity amounted 968,693,573US $. This amount indicated that the average value of one barrel of crude -oil during last year alone was 20,55 US$.

The sources of this export volume may be outlined as follows:

A-Mareeb Zone (sector 18) where about 12,143,243 barrels were produced

B-Jenna Zone (sector 5) where about 600,000 barrels were produced

C-Al-Masila region (Sector 14), where an approximate quantity of 34,390,397 barrels were produced. By adding (a) and (b) above, the total quantity a mounted 12,743,243 barrels that had been produced and exported during the year 1996. The total earnings were estimated 266,719,272 US$ which indicated that the average rate was leveled at 20,93 US$ per barrel.

As for the Masila region, the total quantity for that same year was estimated 34,390.397 barrels of crude -oil, with early earnings of about 701,974,301US$. This gave an average value-rate of 20,44 US$ per each barrel.

However, due to the frequent fluctuations of prices in the international oil markets during the year 1996, this resulted for direct and indirect impacts on the Yemeni crude-oil exports. This can be shown in the following manner:

-Mareb Crude Oil: the average unit-rate (per barrel) reached its maximum at 23,79US$ in December, whilst the minimum was in January at 16,66 US$; whilst the difference between both was calculated 7,13 US$ during the whole year.

Al-Masila Crude- Oil: almost similar to the yearly fluctuations occurring to the case of Mareb above. The lowest average value of export started from 16.65US$, whilst the highest in December reached 23,00US$ per barrel.

General Outlines -Hunt Company started on January 30,1984 digging the first rig in Mareb-Al Jawf Zone.

-On July 8,1984, it was officially announced that the daily average production from Rig No (1) was 7800 barrels. -In September 1985, the work started in constructing Mareb refinery. -On 10-12 April 1986, President Ali Abdullah Saleh, with the pre-president of U.S.A, George Bush, inaugurated Mareb refinery. It is now working with a daily capacity estimated ten thousand barrels of refined oil. -Construction completion of crude oil exporting pipelines, extending 440 kilometers from Mareb Zone to Ras Issa depot. -Inauguration on April 15,1987 of the first oil rig in Shabwa through a Russian firm; after which it evacuated the place, leavening its operations to other European companies. -September 1993 as the inauguration date of Asad Al-Kamel field for oil and gas project in Mareb. -The declaration in November 1993 of new oil discoveries in Al-Masila region of Hadramout. The production from its fields actually started in September 1994 with an average of 120,000bpd. -October 1996 witnessed the inauguration of production in Hilaiwa field (sector 5) of Shabwa, with an average rate of 15,000pbd. Later, other fields within the territory were joined in. This caused a noticeable increase of the production. -February 1996 was the signing date of the gas development projects by all its partners: Total of France (36%), American Hunt Company (14.5%) Exxon of U.S.A (14.5%), Korean U-Kung (8%) and Yemen Gas Corporation (24%).


Last changed: September 15, 2002