Oil Minister: ‘Production will improve soon’
“Our economy is based on oil production and last year was not good for us,” said the minister. “But now we have a new phase and there are measures to improve security and overcome the challenges of the past.”
Yemen’s oil production contributes nearly 75 percent of government revenues and over 90 percent of foreign exchange earnings, according to the US Energy Information Administration (EIA).
Most of Yemen’s oil challenges were caused by tribes vandalizing production or pipeline structures for personal or political gains.
Oil reserves and production are sourced from two areas: the Marib-Jawf basin in the north, and the Say'un-Masila basin in the south. The government estimates that Masila holds about 84 percent of the national total oil reserves.
Last year’s uprising cost the country half of its oil produce, which ranged between 250,000 and 300,000 barrels per day (bpd). In 2011 it was reported at 170,000 barrels a day – a significant change from 2001 when it hit a peak of 440,000 bpd.
This was in addition to regular worker strikes in the pipeline networks and the closure of Aden Refinery, which all left a marked dent on the country’s economy.
To overcome the oil shortage last year, Saudi Arabia donated three million barrels of crude oil and at least 500,000 tons of fuel in January and February 2012.
Moreover, as of January 2012, Yemen had proven oil reserves of around 3 billion barrels and proven gas reserves of 16.9 trillion cubic feet.
According to Sharaf, some measures have already been implemented to improve the situation, especially with the support of Saudi Arabia and other oil-rich Gulf countries who promised to supply Yemen with fuel until it can support itself - hopefully by mid-2012.
“We have a long way to go but at least we have started,” said the minister.