Yemen’s Offers New Oil Terms
This is an accurate though dire asssessment of Yemen’s oil future and the late arrival of “self-awareness” and the current scramble to court oil majors. The whole thing is worth a read but here’s a bit:
IHS Global Insight Perspective
Significance Yemen is offering radically revised production-sharing agreement (PSA) terms and the opportunity of one-on-one bilateral negotiations with the Ministry of Oil and Minerals (MOM) in order to rekindle IOC-and especially oil-major-interest in exploration and production (E&P) investments in the country and reverse its rapidly evaporating fortunes.Implications
Yemen’s completely failed offshore licensing round late last year served as a wake-up call, bringing the realisation that term revisions, institutional and legal reform, the cutting of red tape, and depoliticisation, are all necessary to kick-start investment.Outlook
Even with this realisation the country’s deteriorating security situation-both on- and offshore-is likely to present a formidable obstacle to attracting new investment, while doubts about Yemen’s continued prospectivity seem well founded…For companies looking to undertake virgin exploration, this would today most likely mean venturing out into areas where government authority is completely absent and where the possibility of this being reasserted might well come down to formal military conquest of the territory in question.
Also largely avoided is the topic of piracy emanating from neighbouring Somalia, which is making all sea journeys in the Gulf of Aden, around its far-flung Socotra Island and through the Bab al-Mandab Strait into the Red Sea perilous. The upsurge in incidents over the past year has made undertaking offshore exploration with slow-moving-and extremely expensive-hi-tech seismic vessels virtually impossible, not to mention placing static drilling rigs in the waters.
