Business

Oil Sector Suffers Heavy Losses Due to Bombings

National Yemen

Oil Sector Suffers Heavy Losses

By:Abdo Ayesh

The continuous bombing for oil pipelines in Mareb and Shabwa governorates resulted in a shutdown oil production for most of the oil fields in Yemen. Experts believe that Yemen’s economy is facing a large crisis and the government seems to be in a large deficit as the oil sector suffered nearly 2 billion $US in losses. According to experts, Al-Qaeda linked groups and tribal gunmen are behind the continuous bombing operations of oil pipelines.

Chairman of the Economic Media Center in Sana’a Mustafa Nasr said that operations of bombing oil pipelines aim at blackmailing the government to achieve personal interests.

According to Mustafa, Ali Saleh’s regime committed mistakes as they neglected developing areas where oil is produced. “The former regime should have allocated some of the proceeds of oil production to developing those areas,” he suggested.

Mustafa added that the former regime dealt recklessly with the issues of bombing oil pipelines and did not enforce the laws. “This encouraged vandals and attackers to continue their operations which eventually affected the national economy,” he added.

Nasr called President Hadi and the military committee to put end for the bombings of oil pipelines through restructuring the army units. He added that army units should be redeployed to cover large areas especially those containing the oil pipelines.

“Army units should be deployed in all governments rather than being centered in and around the capital exclusively,” Mustafa says. Mustafa noted that bombing operations in this critical period increased the burden on the new government as it has become unable to fulfill its obligations including employees’ payments and developing the country.

Worse, the government seems to be unable to take serious action against those who bomb the oil pipelines either tribal individuals or Al-Qaeda linked groups.

Saeed Abdulmo’min, member of an oil union said that bombing operations caused total shutdown in oil production and that gunmen did not allow engineering teams to repair the pipelines. Saeed cited statistics showing that the pipelines were subjected to around 21 attacks during the first quarter of this year, which has cost the government huge amounts of money that is supposed to be for the general budget. The attacks, he says, have cut the Yemen government’s annual income in half.

In the meantime Yemen LNG confirms the sabotage of the 38 inch gas pipeline that links the block 18 to the Balhaf terminal on the Gulf of Aden. The explosion occurred at 22h20 on 26th April in a desertic zone at 260 KM North of Balhaf Liquefaction Plant. It caused no victim.

Abdulmo’min reported that shutdown in oil production costs the national economic dearly as oil product accounts for so much of the annual budget. “The bombings alone have cost the national economy around $1.7 billion; a large amount for a country like Yemen,” he added.

It is worth mentioning that Yemen has been going through severe economic crises since last February that was worsened with the armed conflicts and violence in many places of the country. This in return caused the government to mainly depend on the foreign help as a result of meager oil revenue.