Yemen's Oil Production Quickly Restored After Civil War

Strategic Insights -

Washington officials say Yemen's oil production has been quickly restored to nearly pre-war levels following the north's apparent victory in a two-month civil war. However, industry sources believe oil investment is likely to suffer for years to come due to ongoing unsettled conditions in the country. British Petroleum Co. plc plans to leave the country, while Chevron Corp. intends to stay and fulfill its commitments. The country's oil sector has seen a decline in the number of participating companies, with around 30 companies active in oil and gas exploration before the war, which is expected to shrink further.

Key Takeaways:

  • Yemen's oil production has been restored to nearly pre-war levels following the north's victory in the civil war.
  • Industry sources predict a significant decline in oil investment in the country due to ongoing unrest.
  • British Petroleum Co. plc has announced its intention to leave Yemen, while Chevron Corp. plans to stay and fulfill its commitments.
  • The number of participating companies in the country's oil sector is expected to shrink from around 30 to an uncertain number due to continued unsettled conditions.
  • Saudi Arabia has claims on oil rights to border areas in both the north and the south, which may impact oil exploration and production in those regions.
  • Canadian Occidental Petroleum Ltd.'s facilities in the south, including the oil terminal at Ash Shihr, were not damaged during the war, and production was quickly restored to 150,000 b/d.
  • Hunt Oil Co. has repaired the central processing facility in the Alif field and oil production has resumed at a normal rate of 180,000 to 190,000 b/d.
  • Korean oil company Yukong has loaded Marib crude at Ras Isa, indicating a return to normal operations in the country.
  • London maritime insurance firms have not removed war-risk premiums from tankers calling in Yemen, due to ongoing uncertainty.
  • Plans are underway to restore operations at the country's only refinery, a 170,000 b/d facility at Aden, which was damaged during the war.

Statistics:

  • 30: The number of companies active in oil and gas exploration in Yemen before the civil war.
  • 150,000 b/d: The production rate of Canadian Occidental Petroleum Ltd. at Ash Shihr.
  • 180,000-190,000 b/d: The production rate of Hunt Oil Co. at the Alif field.
  • 170,000 b/d: The capacity of the country's only refinery at Aden.

Sources:

  • "Yemen's oil production quickly restored after civil war," The Oil Daily (Washington) no date provided.
  • "Yemen oil industry on fragile ground after civil war," no date provided (although it is likely the same article as the one mentioned in the first source).
  • "Yemen oil output boosted by Chevron, Hunt," The Oil Daily (Washington) no date provided.