LOOKING AHEAD: Oil and gas still in trouble as Mideast wars rage on

• DOI: http://doi.org/10.1111/oet.12544
• Date: 01 December 2017
• Published date: 01 December 2017

LOOKING AHEAD

Oil and gas still in trouble as Mideast wars rage on

YemenandSyriacontinuetobebadlyaectedbywar.

e north of Yemen is being bombed and blockaded by

Saudi Arabia. Syrian forces are having some successes

against the forces of Islamic State (IS) and there are

plans to rebuild the country’s energy sector, although

muchofitremainsinaparlousstateaersix-and-a-half

years of armed conict. Iraq, meanwhile, has retaken

control of its principal northern oilelds, which could

mean problems for the Kurds.

Saudis move against Iran

SaudiArabiaisstepping-upitslongstandingcampaign

to reduce the inuence of Iran across the Middle East. In

a campaign that is led by the C rown Prince, Muhammad

bin Salman, the ki ngdom has been conf ronting what it

regardsasalliesorproxiesofIranincountriesacrossthe

region. In Yemen, itis at war with Houthi rebels from the

northofthecountry,whoareopposedtotheregimeof

President Abd Rabbu Mansur Hadi, which is backed by

Riyadh.eSaudisregardtheHouthisasalliesofIran,

which they accuse of intervening directly in the conict

in Yemen. is has more or less become a war between

the northern and southern parts of Yemen, which existed

as separate countries until 1990. e conict has spread

to all parts of Yemen and has attracted several militant

groups, including ones backed by al-Qaidah and the

Muslim Brotherhood.

Both parts of Yemen have oil- and gaselds; but all

the signicant ones are at present in areas controlled by

the Saudi-backed government in the south. Forces from

Saudi Arabia’s ally, UAE, have successfully opened-up

areas along the Gulf of Aden in campaigns against

Houthis, al-Qaidah and groups backed by the Muslim

Brotherhood, allowing the re-opening of oil and gas

export terminals. Saudi Arabia has been concentrating

its attention on bombing Houthi are as in the north where

many thousands of civilians have lost their lives.

e liqueed natural gas (LNG) terminal at Balhaf

was closed by its operator, Total, in 2015; but further

east on the Gulf of Aden, the oil terminal at al-Shihr

has reopened and was reported to be exporting close to

50,000 bpd in the third quarter of 2017, of which some

35,000 bpd was going to China, with the balance mainly

to ailand. Another terminal exists at Ras Issa on the

Red Sea, which ser ves the Marib and Shabwa elds, both

of which are in the hands of the southern government.

e pipeline to Ras Issa, however, runs through terri-

tory controlled by the Houthis. Some of Yemen’s crude

goes to the Aden renery, although deliveries, which are

from al-Shihr, are reported to be intermittent. Total pro-

duction looks to be about 60,000 bpd: less than half the

130,000 bpd produced in 2014, the last year before t he

present civil war began in earnest.

Advancing against IS

In October, the mainly Kurdish Syrian Democratic

Forces (SDF) announced that they had recaptured the

al-Omar oileld, which had been held by IS since 2014

and from where oil was s old in order to nance its activ-

ities. e following month, the Syrian government said

that troops belonging to its Syrian Arab Army (SAA)

had taken most of the re maining oilelds once occupied

by IS in the country’s main oil province of Dair al-Zur,

although the province itself has yet to be brought fully

under the control of the government.

e government now faces a long period in which it

must try and restore production from both its oil- and

gaselds. At one stage, IS forces controlled nearly all of

Syria’s production, although the government retained

control of the country’s two reneries, at Banias and

Homs, both of which are in the west of the country.

In 2010, the last full year before the outbreak of ght-

ing, Syria produced 385,000 bpd of oil and780 mn cfd of

gas. Last year, the respective totals were 25,000bpd and

345 mn cfd. is year, the SAA retook the IS-held gas-

elds in Palmyra and is now in control of further elds

furthereast.Oneresultofthisisthatthereisnowmore

gas available to fuel Syria’s power stations.

ere is nevertheless still much to do before output

of either gas or oil can be restored to anywhere near

pre-civil war levels, since much of the infrastructure

has been destroyed, especially in Dair al-Zur, where

the US and its allies conducted large-s cale bombing on

oilelds and pipelines in an attempt to prevent IS from

selling the oil. IS also setre to oil- and gaselds as they

wereretreating.egovernmentwillalsohavetoobtain

control of elds now occupied by the SDF and other

Kurdish-backed groups: notonly in Dair al-Zur but also

the Rmailan and Souedi e elds in the far north-e ast of

the country, where the Kurds who control the area are

reported to be producing upto 15,000 bpd. e country’s

war-damaged electricity sector is also in need of exten-

sive repair. Iran has promised to help i n this, and has also

oered assistance in rehabilitating the rening sector.

Kurdish setback

Meanwhile in Iraq, government forces have retaken

the oilelds around Kirkuk, which were formerly

under the control of Kurdish force s and from where

oil was being exp orted by pipeline through Turkey

by the Kurdistan Regional government (KRG). e

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