Yemen opens five blocks for oil exploration

17 September 2012

Oil production has been in decline for a decade

Yemen has invited international oil companies to bid for exploration and development rights in five oil blocks around the country.

The new Oil & Minerals Minister, Ahmed Dares, hopes to increase production and hydrocarbon reserves by attracting foreign investment, according to state-run news agency, Saba. Blocks 6, 15, 84, 85 and 102, are in the Al-Sabaateen, Sayun-Masilla and Mukalla-Sayhoot basins. No date has been set for the auction.

Yemen’s last oil and gas bid round was held in October 2010, where 10 onshore and offshore blocks were up for grabs. However, only three were awarded, with Block 48 going to Norway’s DNO, Block 85 to France’s Total and Block 86 to Austria’s OMV.

According to UK oil major BP, Yemen has crude oil reserves of 2.7 billion barrels, but production has been in steady decline since reaching a peak of about 457,000 barrels a day (b/d) in 2002, due to the lack of new investment in exploration and inadequate maintenance of the country’s existing facilities.

Production averaged about 228,000 b/d in 2011. Some analysts estimate production was less than 170,000 b/d as anti-government strikes, attacks on pipelines, and the evacuation of foreign staff combined to reduce slash production.

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