Thursday, March 17, 2011

Total Says Yemen Oil Production Disrupted by Pipeline Blast

By Robert Tuttle

Sana'a, Mar 17, 2011- Total SA (FP), the largest foreign investor in Yemen, said oil production has been disrupted by a pipeline blast while OMV AG (OMV) said the incident hasn’t halted its crude exports for now.

Total owns a 15 percent interest in Yemen’s Block 5, where output was hit, Phenelope Semavoine, a company spokeswoman, said in a telephone interview today. The company’s production from other blocks wasn’t affected, she said. OMV is exporting oil from stocks in the Arabian Peninsula country, Sven Pusswald, a company spokesman, said.

Yemeni news website Marib Press reported March 15 that armed men caused an explosion that damaged the pipeline, which pumps 120,000 barrels a day. Production from two oil fields was halted as a result, according to the website. The blast would be the second on an energy facility in Yemen in five months, following an explosion on a crude pipeline in November.

Political protests that have overthrown governments in Tunisia and Egypt have spread to Yemen, where demonstrators demanding an end to President Ali Abdullah Saleh’s three-decade rule have clashed with security forces. Saleh is a key U.S. ally in the campaign against al-Qaeda in the Arabian Peninsula. His government also faces a secessionist movement in the south.

Maintain Output

Yemen is struggling to maintain output of crude oil, which accounts for 27 percent of the country’s gross domestic product and 90 percent of its exports, according to the World Bank. Oil production has fallen from 457,000 barrels a day in 2002 to 298,000 barrels a day in 2009, according to BP Plc statistics.

Block 5, which is operated by Jannah Hunt Oil Co, produces an average of 42,000 barrels a day, according to Total’s website. Total also operates block 10, which produces about 60,000 barrels a day, and is the biggest shareholder in a Yemen liquefied natural gas venture, Yemen LNG Co.

OMV operates the Habban oil field, which produced 6,300 barrels a day in 2009, the company said in its annual report that year.

Source: Bloomberg

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