Business for Peace Award

Oil workers’ strike costs $17 million in daily losses

Published on 16 February 2012 in News
Ali Saeed (author)

Ali Saeed


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SANA’A — Yemen has been losing $ 17.5 million every day since Thursday, February 9 when workers at the newly-established Petromasila National Company went on strike to demand severance payment from the previous foreign operator, Canadian Nexen.

Canadian Nexen left Hadramout’s Al-Masila field last December.

The strike has stopped the exportation of around 160,000 barrels of oil from Al-Masila, Yemen’s major field, according to a source at an oil company in Hadramout.

“No doubt, this has seriously impacted Yemen. It is depriving Yemen’s budget of around $17.5 million every day, with 160,000 barrels halted,” Dr. Mohamed Jubran, a professor of economics and financial analysis at the University of Sana’a told the Yemen Times.

This halt will also negatively affect the country’s public budget, as the government will be obliged to take loans to cover expenditures, according to Jubran.

He also added the payments and trade balance will be impacted, as the incoming cash flow will be lower than that of outgoing cash.

A Total spokesman told Reuters on Wednesday that his company - which is one of the operators at Al-Masila field, with a share of 70,000 barrels day — had to halt production after workers at the newly established company went on strike.

A source from another oil company explained that Total stopped its production at block 10 because the workers’ strike at Petromasila had suspended output exportation.

Jubran criticized the strike, saying “they should demand rights from Canadian Nexen. Their present actions only punish their country.”

A statement released by the Petromasila Company workers’ union read that corruption at the Yemen’s Oil Ministry and Oil Exploration Authority is behind the bad situation at the newly established company.

“They [the Oil Ministry and Oil Exploration Authority] have allowed Nexen to leave the block without paying its financial commitment,” read the workers’ statement.

“Despite communication from the workers’ union to the Oil Ministry not to let Nexen leave until it covers its financial and technical obligations, Nexen left without paying,” the statement read. “We therefore resorted to our legal right, which is to strike.”

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