The Canadian Oil company Nexen which is currently operating in Yemen is facing yet another hurdle in its attempt to extend its exploration and production license. The company has been negotiating a 5-year extension permission with the Yemeni government for the past few months but so far has faced a wall. Nexen is now running out of time since its contract with Yemen ends this coming December.
Nexen produces in Yemen 35,000 barrels of crude Oil a day, which represents about 10% of its worldwide production and therefore a huge proportion of its capital. A loss of license would certainly impair the company's income, especially since it has been facing difficulties at its North Sea assets.
Since Yemen has been enthralled in its worst political crisis in decades, with the specter of civil war looming ever so present, Nexen's executives were unable to reach an agreement with the Oil Ministry. The Yemeni government understandably is concentrating its effort elsewhere.
"It [license extension] is not going to be easy... It is a difficult process under a political crisis," said a senior government official.
"In case of no agreement, they [Nexen] will have to hand over to a local company... There is not going to be any stoppage of oil production," he added.
Nexen's spokesman confirmed that the company was still discussing the matter with the Yemeni government, adding that no statement would be made until the full completion of the negotiation process.
Sources within the government are talking however of the possibility of having Safer E&P Company taking over Block 14 and 51.
"It looks like there is a mood within the government for SEPOC to take over Block 14 in Masila," the industry source said.
If Nexen is to disappear to Safer, it would be the second foreign Oil Company after Hunt Oil to lose its license in favor of the state-run company.
Source: Yemen Post
No comments:
Post a Comment