Promising Oil and Minerals Future

The oil sector would always remain the basic source of income and revenues for the Yemeni economy because it generates numerous investment opportunities. Yemen being a virgin land, all of its diverse and various potential wealth is a sign of a very promising future.

Actually, wide oil explorations took place over the last period of time in Yemen as a result of flow of many international oil companies (IOCs) to operate in the Yemeni oil industry. Despite the big flow of IOCS, oil operations are only conducted on a very small part of Yemen's concession areas.

Yet, with new oil discoveries, exploration activities increased and fostered more to create a significant development in infrastructure.

Furthermore, there are many open blocks showing good omens for further oil discoveries. This is so for only 80% of the areas allocated for oil exploration have not yet been discovered. Besides the oil sector, there are possible opportunities in gas and minerals.

• A brief breakdown of the oil, gas, and minerals activities is as follows:
• Until December 2006, the total number of oil blocks is 87; out of which only 12 produce oil and another 26 are under exploration.
• The number of oil companies is 28; 12 of which are producing oil and 16 are exploring for oil.
• Since the discovery of oil in Yemen until now, 83 PSA's have been signed.
• The number of drilled oil wells is estimated at 1824.
• Seismic surveys were as follows:
  • 2D surveys were done on an area of 170.764 km;
  • 3D seismic surveys were conducted on 6071 km.
• Exploration has been done by 57 IOCs on 39 blocks since the discovery of oil in Yemen.
• At present there are 51 blocks having the potentials to produce oil.
• There are 12 blocks which are actually producing oil.
• The oil in place in the producing blocks amount to 9.7 billion barrels.
• 2.3 billion barrels have already been produced.
• Total gas reserves discovered in the producing blocks account for 16.3 trillion cubic feet.
• There are 83 LPG plants.
• By the end of 2006, LPG consumption increased by 705.403 metric tons.
• Production of LNG would start at the end of 2008.
• Gold was discovered in Wadi Miden, Almukalla, Hadhramout, which is one of the typical and unique gold locations in Yemen.
• There 891 sites containing constructional and decorative rocks.
• There are 10 companies doing minerals exploration and extraction.
• Many surveys were conducted on minerals in Yemen;
• A contract for zinc, lead and silver exploitation was signed with ZincOx to inaugurate the first mine in Yemen.

Oil Blocks in Yemen

Following the discovery of commercial amounts of oil in the eastern and mid areas of Yemen, the number of international oil companies working in oil exploration and production increased rapidly. Yemen has very large concession areas distributed between its middle and eastern parts. In addition, offshore areas are of a big volume located in Aden Gulf, the Red Sea and Suqtra Island.

On close scrutiny of the Yemeni oil map, it is possible to infer the following:

• The total number of oil blocks amount to 87.
• There are 13 production blocks operated by 11 oil companies.
• 26 blocks are at the exploratory phases operated by 16 oil companies.
• There are 7 blocks pending approval.
• There are 28 open blocks.
• There are 14 blocks waiting promotion at the time being.

In fact, oil is the main source of energy in the Republic of Yemen. Because of its fundamental significance, the Yemeni government considers oil as the basic element for building its national economy. Oil is used in financing the construction of socio-economic and development projects which constitute the infrastructure of the national economy. It is also the source of extracting useful derivatives and products exploited in different basic industries.

Moreover, the oil reserves of the Republic of Yemen estimate at 9,718 billion barrels. It is worth noting that fresh information on sedimentary basins in Yemen indicates that there are many promising concession areas located at 12 sedimentary basins. At the time being, Yemeni oil production is only from 2 sedimentary basins out of the above-mentioned 12. Producing oil only from two basins gives us more inspiring and optimistic indicators. Other indicators are the 87 blocks, out of which only 12 produce oil. Yet, the size of a block differs from one to another. The average size of a block is 4 thousand square kilometers unlike Safer block whose area is 8 thousand square kilometers. This indicates that Safer Company, the new operator of the block, is still at its beginnings as it is working in a very small part of the block.

In addition, there is an orientation towards exploiting offshore blocks located at the Arab Sea, Aden Gulf, and the Red Sea. Historically speaking, an oil company carried out drilling operations between Al-Mukalla and Sayhout. The result was the discovery of 3 thousand barrels in one of the wells but because of political reasons, the well was closed down. That was a very simple indicator, so now there is an Australian oil company working on block 15. It would start exploration in January 2007. Promoting the offshore blocks would start at the beginning of 2007.

Another crucial indicator of Yemen's oil potentials is that in the 14 blocks under promotion there are more than 60 oil companies applying and proposing to operate them. The coming of such companies to Yemen is a very good omen to Yemen and in other words it indicates that such companies have sufficient and accurate data and indicators of the future of investment in Yemen