Yemen

Investment & Operational Criteria

Key Indicators

Risk Premia

20.000

%

Outlook

Negative

Rating

D|6X|-

Ranking

121

Reserves (1P)

Total

mm boe

Oil

50

%

Summary

The civil war in Yemen has halted external O&G investment and the recent Houthi attacks have exacerbated issues. The uncertainty as to how the domestic and international issues will be resolved has created significant uncertainty, supports our Negative outlook, and is underlined by our upgrade to the risk premia to 20%.

Updated

January 25, 2024

Country Basics

Region

Middle East

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

YemenYemen

Middle East, bordering the Arabian Sea, Gulf of Aden, and Red Sea, between Oman and Saudi Arabia.

Outline

Tax Regime
Type

PSC/PSA

Tax Regime
Notes

Production Sharing Contract ("PSC") based fiscal regime. The Yemen Oil Company (YOC) has the right to take a carried equity interest of between 5% and 25% upon a commercial discovery. Royalty and production sharing splits, are determined by production rates. Cost recovery ceilings are variable and a range of bonuses, rentals and fees are payable.

Investment & 
Operational
Climate

Yemen’s daunting economic challenges are made worse by ongoing political turmoil. Civil conflict has devastated the economy and destroyed critical infrastructure. Even before the current conflict, mismanagement and corruption had resulted in chronic poverty, underdevelopment, and minimal access to such basic services as electricity, water, and health care in much of the country.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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