Yemen’s oil revenues declined to $ 513 million

National Yemen

Yemen’s oil revenues declined to $ 513 million

BY NY Staff

Safer Exploration & Production Operations Company, Yemen’s main oil export pipeline in Marib basin has started working again after damage caused by a bomb attack earlier this month was repaired, security and oil sources said on Saturday.

Tribesmen attacked the pipeline in central Maarib province on Sept. 14 – their fourth assault on it in a month – halting flows to the Ras Isa terminal on the Red Sea.

Groups often damage or destroy pipelines to press the government to provide jobs, settle land disputes or free relatives from prison.

Yemen relies on crude exports to finance up to 65 percent of budget spending.

A government report showed that Yemen’s revenues from crude oil exports declined to $513 million in July, totaling $1.560 billion on the year, compared with $1.47 billion for the same month last year.

The report issued on Saturday by the Central Bank of Yemen disclosed that the revenue decline coincided with the decline of the Yemeni government’s share of the total production of crude oil for the period between January 2013 to July 2013.

During this period, production declined by 3.8 million barrels to 14.4 million barrels total, a sharp reduction from the 18.200 million barrels total produced in the same period last year.

The continuing decline in the production of Yemen’s oil, which has negatively affected the government’s export revenues, has forced the government to import oil derivatives of $1.594 billion dollars during the period from January to July 2013 to cover the deficit generated from domestic consumption in the country.

Compared to its international competitors, Yemen is a small producer of oil. Its production is between 280 and 300 thousand barrels a day. This number is in sharp contrast to its previous years’ output of more than 400 thousand barrels per day.

The revenue generated by crude exports obtained by the Yemeni government through production-sharing with foreign oil companies contributes to 70% of the resources of the state budget, 63% of the country’s total exports, and 30% of its GDP.

The financial statements published by the official Yemeni news agency showed that Yemen’s foreign debt rose during the month of July 2013 by $24 million to reach total of $7.2 billion.

These statements showed that international financing funds are on the top of Yemen’s creditors list at 3.504 billion dollars. Of that amount, more than two billion dollars are for the International Development Association.

They also revealed that Yemen’s reserves of foreign currencies declined for the fourth consecutive month reaching a total of 5.628 billion dollars in July.

The statements of the Yemeni Central Bank emphasized the decline of foreign exchange reserves combined with the continuing rise of the petroleum imports to cover the needs of the local market that faces a cash flow scarcity.