Summary
- Oil production dominated by 2 blocks:
- Masila (Bloack 14)
- Licence expired in 2011
- Operations taken over by newly formed government op co
- May impact production levels and future development
- Marib-Jawf (Block 18)
- Production peaked in 2002 at 160mbopd
- Absent further discoveries, reserves will be depleted over next decade
- A number of licences are due to expire in coming years, if not renewed, could exacerbate declining reserves problem
- Small discoveries in basement formation by Total and OMV may help reduce decline in the immediate future
- Deteriorating security situation
- Attacks on Marib export pipeline means pipeline regularly non-operational
- Ongoing tensions between gov and local tribesmen
- Unrest will impact future production as troops previously assigned to guarding oil infra are relocated to cities
- In recent years, government has addressed declining revenue from oil by monetising gas
- Yemen LNG commissioned in 2009
- Fed by Total-led East Shabwa gas project
- Government also keen on moving away from heavily subsidised diesel power gen by incentivising gas on commercial terms
- Due to maturity, Yemen of interest to small/med cos
- Despite security concerns, attractive fiscal terms and rel low capex/opex mean attractive returns on investments can be made for those willing to accept risk
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