That MEED Article
Below, I briefly discussed an article abstract by MEED, a subscription to which costs some 1200 bones. Valued reader David, however, saved the day by providing a link to Google’s cached page of it. A huge Waq al-Waq tip of the hat goes his way.
The first part of the article is pretty standard, and nothing will come as a surprise to anyone who reads this blog. There are some interesting numbers in that section regarding revenue, birth rate, and water consumption, issues that can never be mentioned enough (the latter two are eternal biological backdrops against which the political drama is being played out). Here is a quick look at the water one.
Access to water is also a serious issue. According to the UN, Yemen will use 3.97 billion cubic metres of water in 2010, despite having only 2.5 billion cubic metres of renew-able supplies.
Little respite from these problems is likely in the coming years, as the country’s population is forecast to grow from 23 million today to 50 million by 2035.
There are some sobering items later in the post, one of which is both fascinating and heartbreaking in a “geography is destiny” kind of way.
Yemen is keen to tender new oil exploration and production licences, but international oil companies remain underwhelmed.
“Geologically, the most attractive oil blocks are offshore,” says a senior executive at one oil company working in the country. “But then there are the obvious issues with piracy in the region. The question is, why would you invest in Yemen? Because of the complex geological structures onshore and the depth you would have to drill at offshore, the costs here would be incredible. Then there are questions of infrastructure, how you export the oil, and of security.”
The executive says that given the global economic climate and fears over the stability of the country, little new interest is likely in the near term.
There is also a quick little punch that helps dispel the hope- however often delayed- that the LNG pipeline could make a big difference.
A new liquefied natural gas (LNG) project run by the Yemen LNG group led by French oil major Total is forecast to add about $30-50bn to the country’s revenues over the next 25 years.
But the company’s shareholders first need to recoup their $4bn investment. By the time the project starts making positive contributions to the economy it may be too late, says Lahn.
The thrust of the article is a little strange and contradictory to me- but, then, so is much of Yemen. The article encourages Yemen’s neighbors to invest, because it argues (rightfully) that the chaos of a collapsed Yemen will not be contained within its fluid borders. However, the article also spent its bulk talking about why investing in Yemen was a fool’s errand. Sadly, however, this wasn’t a confused article- both of its arguments were accurate, and that is Yemen’s great tragedy.