Yemen output halted amid protests

19 January 2015, News Wires – Oil and gas operations in parts of Yemen, including the Total-led Balhalf gas export facility, have suspended operations amid protests over the seizure of a presidential aide by Shi’ite fighters who control the capital Sanaa, reports said.

yemen lng balhaf export terminal

Yemen LNG Balhaf export terminal

The Shi’ite Houthis seized President Abd-Rabbu Mansur Hadi’s chief of staff, Ahmed Awad bin Mubarak, a native of the southern Shabwa province, on Saturday amid a dispute over a proposed new constitution that threatens to bring down the government, Reuters reported.

“Several oil firms with small production capacities have shutdown their operations in protest of the kidnapping,” a local official in Shabwa told the news wire.

Another official said all oil companies in Shabwa had suspended work as part of an understanding with the local tribesmen, who have been angered by bin Mubarak’s seizure.

Crude production from Yemen’s Masila oilfields in Hadramout province also stopped due to protests over bin Mubarak’s seizure, labour union officials told Reuters by telephone from the eastern Hadramout province.

Yemen is a small producer with proven oil reserves of around 3 billion barrels, according to the US Energy Information Administration (EIA).

Yemen has two primary crude streams, the light and sweet Marib stream and the medium-gravity and more sulfur-rich Masila stream. According to the government, the southeast Masila Basin holds more than 80% of the country’s total reserves, an EIA report said.

The decision to shut down production came following tribal leaders contacting the oil firms and giving them instructions, the officials said.

Yemen’s only gas terminal at Balhaf in Shabwa in the Gulf of Aden also stopped its operations after foreign experts were evacuated from the liquefied natural gas export facility late on Sunday, the sources added.

Total is the biggest investor in Yemen’s gas export industry through its 40% shareholding in Yemen LNG, where its partners are US-based Hunt Oil on 17%, state-run Yemen Gas Co on 17% and Korea Gas Corp (Kogas) on 6%.

Operating since 2009, the facility exports LNG to Europe and Asia. It has the capacity to supply up to 6.7 million tonnes per annum with exports of LNG tied into long-term contracts to partners Total and Kogas as well as GDF Suez.

On Monday, Houthi rebels led violent clashes in Sanaa in a district that houses the country’s president and other high level security officials.

– Upstrea

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