Sanaa oil revenues drop 3 per cent

19 November 2009

Yemeni government faces cash crisis

Sanaa’s oil export revenues fell 3.3 per cent in September as a result of a lower government share of the country’s production and falling prices during the month, according to a Central Bank of Yemen report issued on 18 November.

The government’s share of overall production fell from 5.44 million barrels a day (b/d) to 4.92 million b/d between August and September. International oil companies (IOC) produce the country’s oil before giving Sanaa a contracted share of the output.

The government increased export levels to 3.12 million barrels a day during the latter month, from 3.04 million barrels a day in August as domestic consumption fell from 2.4 million barrels a day to 1.8 million barrels a day.

An average price for Sanaa’s oil exports of $68 a barrel in September as opposed to $72 a barrel in August meant overall revenues fell from $219.4m to $213m over the month.

Sanaa’s oil revenues from January to September are $1.23bn and are 66 per cent lower than the $3.9bn the government raised during the same period in 2008.

The country faces a severe cash crisis as foreign currency holdings of $7.4bn are only sufficient to cover 8.9 months of imports. Oil revenues make up about 70 per cent of the country’s annual budget, and Sanaa has been fighting a war with tribal rebels in the northern Sadaa province since August.

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