Bahah: Oil production will increase by 2009

According to Minister of Oil, Gas and Mineral Resources Khalid Bahah, Yemen’s Oil and Gas prospects in 2009 is quite optimistic. Crude oil production is to reach 500,000 barrels per day; Extraction capacity from current reserves will increase from 30% to 70%; and income from sale of natural gas will reach US$ 1-2 billion per year.

During a recent interview with the Yemen Times, Mr. Khalid Bahah, Minister of Oil, Gas and Minerals stated that the current gradual decline in oil production is the result of Yemen’s reliance on two main blocks for the production of oil – block 18 Mareb and block 14 Masila. In addition, the country has been slow in drafting plans to compensate for the foreseeable decline in oil production. However, he stated that his ministry launched an extensive oil exploration campaign last year in order to regain an increase in oil production, emphasizing that the results of this exploration campaign will not be visible until 2009.

“We know that block 18 Mareb began production over 20 years ago, and the expectation for the last five years indicates that the current production of that block should be zero. This means that, in theory, there should be no production from block 18 Mareb now, and we should’ve been ready for this,” Mr. Bahah stated, adding, “Our current expectation is that Yemen’s oil production from these two main blocks will be zero by 2011. The difference is that now we have a number of prospects, and explorations in several new blocks are very promising.”

He also stated that previous explorations have been very slow and findings weren’t worth mentioning, adding that the current challenge is to stabilize and increase oil production within the next two years.He further revealed that the number of exploration blocks has increased from 26 blocks in 2006 to 40 blocks this year, and hopefully by next year if the success rate of exploration activities reaches an average of 25 percent, Yemen will be able to push production back to 400,000 barrels per day.

However, Mr. Bahah commented that Yemen’s target is to produce 500,000 barrels per day by 2009, and the strategy to reach that target is a realistic one and depends not only on heavy exploration activities, but also on the introduction of new technology, which will allow for an increase in production from the same blocks. He stated, “Current drilling and production technology allows you to extract around 30-35 percent of your oil reserves, however, new technological equipment will allow you to extract up to 70 percent of the oil reserves, which might potentially double production in particular blocks.”

In a statement made to Al-Thawra Official newspaper dated January 16, 2005, previous Minister of Oil, Dr. Rashed Baraba’a stated that geological surveys indicated that Yemen is about to launch a campaign to increase exploration activities and oil production from blocks 43, 9 and 20, adding that Yemen’s oil production will continue to increase. This was contrary to official reports, which indicated that Yemen’s oil production was suffering a gradual decline and that exploration activities were sluggish.

It is worth mentioning that the current production of block 18 Mareb stands at around 60,000 barrels per day, while block 14 Masila’s production stands at roughly 200,000 barrels per day. Yemen’s current oil reserves exceed four million barrels.