Yemen's energy consumption
Yemen's energy consumption is heavily reliant on hydrocarbons, which account for approximately 80 percent of government revenues and 25 to 30 percent of the country's gross domestic product (GDP). The nation has faced significant challenges in its energy sector growth due to ongoing political instability, terrorism, and inconsistent industrial investment. As of recent estimates, Yemen has a population of over 32 million people and has seen a decline in vehicle ownership and gasoline consumption per person in recent years, reflecting broader economic difficulties.
With proven crude oil reserves of about 3.1 billion barrels, Yemen's oil production peaked in the early 2000s but has been on a steady decline, averaging just 15,000 barrels per day as of 2023. Natural gas production, which began in 1993, saw a peak in 2005 but dropped to 6.6 billion cubic feet by 2022. Following the initiation of liquefied natural gas (LNG) exports in 2009, the sector has faced setbacks due to civil unrest, with major projects like the Balhaf plant ceasing operations in 2015.
Yemen's geographic position near major shipping lanes adds to its strategic importance, yet ongoing conflict and security issues hinder international investment and energy exports. Efforts to transition to alternative energy sources, such as geothermal energy, are in progress, but the overall energy landscape remains precarious amid the nation's broader economic and political challenges.
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Yemen's energy consumption
Official Name: Republic of Yemen
Summary: Yemen relies on hydrocarbons for about 80 percent of its government revenues and 25 to 30 percent of its gross domestic product. Political unrest, along with terrorism, and inconsistent industrial investment has stymied energy-sector growth.
Yemen is an Arab state of more than 32 million people (2024 estimate) on the Arabian Peninsula off the Gulf of Aden. It was formed in 1990 by the uneasy merger of two formerly independent states, and secessionist impulses remain alive. In 2011, it also endured major political unrest as insurgents sought to remove its president of more than three decades, Ali Abdullah Saleh, who finally stepped down in November of that year. In 1998, Yemen had 109 cars per 1,000 people, and Yemenis consumed 79 liters of gasoline per person. As of 2022, the nation had 35 cars per 1,000 people and Yemenis consumed an average of 3.939 million British thermal units (Btu) per person, according to the CIA World Factbook.
Yemen is located on the Bab el-Mandeb, a major shipping lane that provides critical access for tankers to the Suez Canal and Sumed pipeline complex from the Gulf of Aden and Persian Gulf. About 6.2 million barrels of oil passed through this lane each day as of 2023. The alternate route to western markets is a long and costly trip around the southern tip of Africa. Companies doing business in Yemen included Norwegian, Canadian, Chinese, French, United States, Italian, Australian, Hungarian, Korean, Greek, and British firms.
In 2011, as part of the Arab Spring uprisings, Yemenis clashed with guardsmen in demonstrations for the resignation of the country’s president, Ali Abudullah Saleh. Revolt and terrorism have led to international concerns over the security of the country’s energy exports. Unrest included calls for the south to break away and revert to a separate state, as it was before the 1990 merger. One company evacuated personnel, but there was no initial impact on exports of liquefied natural gas (LNG). Somali pirates and Yemeni tribal disputes have raised security concerns about both the safety of shipping and the security of the pipelines in north Yemen.
Yemen relies on hydrocarbons for 80 percent of its government revenues and, 25 to 30 percent of gross domestic product (GDP). Declining revenues led Yemen to seek more foreign investment in order to maintain the basic services to its population. However, a recalcitrant parliament blocked extensions of long-standing agreements with the oil companies, hampering the government in its pursuit of outside investment to restore declining production rates. LNG exports were expected to offset declining oil export revenues.
Natural gas production began in 1993 and peaked in 2005 at 727 billion cubic feet—but rebounded in 2008 to over 1,000 billion cubic feet. In 2022, production stood at 6.6 billion cubic feet. Yemen had 478.555 billion cubic meters of proven gas reserves (as of 2022) and began exporting LNG in 2009. However, requirements for reinjection increased and consumer demand grew. Government planned to shift from diesel to natural gas for power production. As new exploration for oil revealed new natural gas pockets, the government required that companies invest in natural gas as a condition of their contracts.
Yemen exported 8.8 billion cubic meters of natural gas in 2014, much of it to North America and Asia. LNG was produced at Balhaf at a $4.5 billion facility that opened in October 2009, the largest industrial project ever for Yemen. The plant was enlarged in April 2010 and by the end of 2011 had reached a total annual capacity of 6.7 million metric tons, according to the French company Total. However, because of civil war, Total shut down LNG production at Balhaf when it evacuated Yemen in 2015. As of 2024, natural gas exports had not been restarted.
In late 2010, Yemen awarded a contract for $1.8 million to drill the first exploratory well for geothermal energy to generate electricity. The joint effort involved the Yemeni firm Al-Madhla’e as well as an Icelandic company, with additional funding from the United Nations and the Yemeni government. Italy and Germany would oversee the effort. An earlier study identified all potential Yemeni geothermal sites between 2001 and 2006, and another defined the geological and chemical makeup of the site selected. The goal was to complete the well within a year and launch Yemen as a producer of clean energy. The exploration remained ongoing in the 2020s.
As of 2021, Yemen’s proven crude oil reserves were 3.1 billion barrels. The Sayun-Masila Basin in the south has the great preponderance, with Block 18 holding 84 percent; the other major field is the Marib Al-Jawf Basin in the north. In 2023, daily crude oil production averaged 15,000 barrels (down from 2009’s 286,000–298,000 barrels). The peak years were 2001, with 440,000 barrels per day, and 2002, with 457,000. Production is expected to continue its decline. In 2013 Yemen exported 68,160 barrels of crude oil and 29,770 barrels of refined petroleum products per day; it consumed 144,000 barrels of refined petroleum per day. As production declines, domestic demand rises, and as early as 2007 Yemen was importing refined products, primarily residual oils and distillates, at a rate of 63,000 barrels per day.
Yemen’s oil sector was a collection of state-owned companies in partnership with foreign companies. Nine international companies worked twelve blocks as of 2010. One state company formed in 2005 to replace Mobil after the parliament refused to renew the company’s release. This is the sort of uncertainty that hampers Yemen’s efforts to maximize return on its oil by deploying enhanced recovery technology. As political turmoil has grown, overall economic expansion has stalled and energy production all but ceased. The World Bank ranked Yemen 187th out of 190 national economies for “ease of doing business” in its Doing Business report in 2019.
Bibliography
Anam, Fares. “Yemen Seeks Geothermal Energy.” Yemen Observer, December 18, 2010. http://www.yobserver.com/local-news/10020379.html.
"Economy Rankings." Doing Business, The World Bank Group, 2024, archive.doingbusiness.org/en/rankings. Accessed 12 Aug. 2024.
"Yemen." CIA World Factbook, 7 Aug. 2024, www.cia.gov/the-world-factbook/countries/yemen/. Accessed 12 Aug. 2024.
"Yemen." International Energy Agency, 2024, www.iea.org/countries/yemen. Accessed 12 Aug. 2024.
"Yemen." US Energy Information Administration, 13 Nov. 2020, www.eia.gov/international/overview/country/YEM. Accessed 12 Aug. 2024.