WATCHING THE WORLD PICKING UP THE PIECES IN YEMEN

Yemen's civil war is over, and foreign oil companies are trickling back to pick up the pieces of their operations.

However, at least one company, Lasmo plc, London, has decided to stay away for good.

Middle East Economic Survey reckons Yemen's oil production is currently 330,000 b/d, with 180,000 b/d coming from Marib and 150,000 b/d from Masila fields. Work also reportedly is under way to restore the Aden refinery to its 85,000 b/d prewar capacity.

Canadian Occidental Petroleum Ltd., Calgary, was said to have produced an average 148,300 b/d from Masila field in the second quarter. One report said Masila production was shut in for only 16 hr during the fighting.

EXPATS RETURN

Companies recalled expatriates in May (OGJ, May 16, p. 25). Shell Internationale Petroleum Mij. By has sent one expatriate back to Yemen since the war ended. He is general manager of Shell's lubricants marketing company in Sana'a.

Shell's 15 other expatriates were explorationists. There is no plan to send them back to Yemen. Shell has expressed disappointment with drilling on Shabwa Block S1 and is evaluating seismic and drilling results before deciding on further plans for the concession.

BP Exploration Operating Co. Ltd. has met all its commitments in exploration of Shabwa Blocks 7 and 8. Seismic work was just being wound up when the war broke out. BP has sent two expatriate staff back to Yemen to tie up loose ends. Like Shell, BP is reviewing results before deciding on further plans.

British Gas plc has sent two contractors to Yemen to evaluate the commercial viability of a full return. Their work is being hampered by poor transportation and outbreaks of cholera in parts of the country where British Gas was exploring.

In the meantime, British Gas has taken over as operator of the Hood block after Lasmo pulled out of the concession.

British Gas has submitted to Yemen's Ministry of Oil & Mineral Resources a plan to parcel out the Hood license interests among remaining partners.

One of the partners, Coplex Resources NL, Hobart, Tasmania, says Wadi Sana-1 and Qabr Hood-1 wells on the Hood block should be reentered. Coplex says a number of potentially productive zones in these wells should be tested.

TOUGH TERMS

Lasmo decided the prospects on Hood block were not sufficient for its own needs, said Martin Scott, Lasmo's general manager in Yemen prior to closure of its Sana'a office July 31.

"Our withdrawal from Yemen was based on a technical decision about the prospectivity of the Hood block," Scott said. "It was nothing to do with the war."

Lasmo's problem with Yemen was the government's tough license terms in view of recent low oil prices.

"Oil companies rushed into Yemen like the Gadarene swine," Scott said. "Terms they negotiated in the heat of the moment don't look so good in 1994. Yemen has to ease its terms if it is to reattract oil companies. A long term approach to oil exploration would serve the country much better."