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Light in the darkness for Yemen?

Yemen’s energy sector is trying to emerge from al-Qaida’s rule and a broader civil conflict. It is a slow process

THE COUNTRY'S energy authorities have had two events to cheer about in re­cent weeks. In June, a UAE tanker carry­ing 14,000 tonnes of petroleum products docked at the port in Aden, Yemen's sec­ond city and temporary capital while Sanaa remains in rebel hands. The offloaded fuel, the first of several promised deliveries, was pumped to power stations, bringing to an end many days of blackouts for at least some sections of the population.

The second event, two months earlier, was the recapture by pro-government forc­es of the southern coastal city of Mukalla, which had been under al-Qaida control for a year. Retaken, too, was the oil exporting ter­minal of Ash-Shihr, 60km east of Mukalla. Before the uprising by the Houthis and army units loyal to former Yemeni president Ali Abdullah Saleh, Ash-Shihr was handling up to 80% of Yemen's oil exports. The expul­sion of al-Qaida fighters from Mukalla and other coastal areas of Hadhramaut province has raised hopes that production might be able to resume from oilfields in the Masila Basin. But it is a matter more of hope than expectation - at least in the short term.

When al-Qaida captured the Mukalla region in April they seized around 2m bar­rels of oil in storage at Ash-Shihr and tried unsuccessfully to export it. They ended up selling it locally, or exchanging it for smug­gled petroleum products. Today the tanks are depleted and will be refilled only when oil companies decide that it is safe for their staff to return to the oilfields to the north.

The two main fields in the Masila Basin are in Block 10 (East Shabwa) and Block 14 (Masila). The former was operated by Total until December 2015 before being handed over to a state-owned Yemeni company, PetroMasila.

Production from East Shabwa was run­ning at 31,000 barrels a day in 2014, but halted later in the year as the fighting in the country spread. PetroMasila is also the oper­ator of the Masila Block, where production was averaging close to 40,000 b/d in 2014.

Strong position

The same state company operates the central processing facilities for the fields in Hadhramaut and Shabwa prov­inces, as well as the storage and export facil­ities on the coast. These have the capacity to store 3.5m barrels of crude oil before it is pumped to two single-point mooring buoys at Ash-Shihr.

PetroMasila believes it is in a strong po­sition to resume operations at East Shabwa and Masila when the moment comes be­cause its workforce is overwhelmingly Ye­meni and is therefore already on the spot. By contrast, international oil companies, sever­al of which have pulled out of Yemen over recent months, would need to be convinced that security and stability had returned be­fore redeploying their staff there. 

In the middle of May, 47 people were killed in a suicide bombing in Mukalla, while Aden has witnessed numerous bombings and attacks on security officials, politicians and judges – on top of rampant crime and lawlessness

 At present, there is nothing like stability - even in those cities over which pro-gov­ernment forces have nominal control. In the middle of May, 47 people were killed in a suicide bombing in Mukalla, while Aden has witnessed numerous bombings and attacks on security officials, politicians and judges - on top of rampant crime and lawlessness.

As the government, supported by its Arab allies, continues its campaign to drive al-Qaida out of cities in the south of the country, the main Saudi-backed war against the Houthis continues, with neither side in the conflict making significant progress on the ground. UN-sponsored peace talks are continuing in Kuwait, but are making little progress.

The two parties have agreed on prisoner exchanges, but remain far apart on key is­sues. The Houthis are insisting on a right to share power in a future government, a demand rejected outright by President Abd-Rabbu Mansour and his negotiators. They say that peace must be built on a Houthi withdrawal from all towns and cities which they still control.

So the day when stability returns and Ye­men's energy sector has something solid to cheer about still seems distant.

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