Oil services company stalled by Yemen protests to resume work

National Yemen

A Dubai oil services provider that drew a third of its revenue from Yemen before protests erupted this year hopes it can restart drilling within months.

SPD, a well engineering consultancy wholly-owned by the contractor Petrofac, was helping to develop Yemen’s prized Block Four when unrest forced it to suspend operations in March.

Prospects for a return brightened last week when Ali Abdullah Saleh, the Yemeni president whom protesters had called on to resign, agreed to yield powers to his deputy.

“It looks likes there’s a step in the right direction,” said Alistair Davidson, the managing director of SPD. “I’d like to think we can get going by the middle of next year.”

Yemen, where SPD has done work for the part-UAE owned DNO and OMV oil companies as well as the South Korean state producer Korea National Oil Corporation, once gnerated about US$20 million (Dh73.4m) in revenues each year.

During the unrest, international oil companies such as France’s Total evacuated foreign staff from major projects there, and smaller companies including SPD had to halt work that was near the start of drilling.

“They’re certainly not willing to invest in Yemen right now, or Egypt, or Libya,” said Mr Davidson. “That’s been quite painful. It’s caused our performance to flatten for 2011.”

SPD provides risk consulting, well design and rig operation in the UAE and other countries in the region as well as the North Sea.

The loss of Yemen hit hard because it was home to many of the small, independent exploration companies SPD catered to, said Mr Davidson.

Yemen, which was the world’s 32nd-biggest oil producer before this year, has lost output since 2002 when it hit a peak of 457,000 barrels per day.

Falling oil revenues have not helped the case of the Arab world’s poorest nation, which sits at a strategic point along the sea passage used by tankers bearing crude from Saudi Arabia and the UAE.

In December, Abu Dhabi-owned Mubadala Oil and Gas signed a deal with the Yemen Company for Investments in Oil and Minerals to cooperate on redeveloping Yemen’s declining fields.