Houthis capture districts in key Yemeni oil province

Yemen's Houthi militants say they have captured two districts in Marib, one of the country's key oil producing provinces, the latest escalation as the country enters its seventh year of civil war.

The districts of Rahabah and Mahliyah were captured from government forces, despite the Yemeni government forces being backed by Saudi airstrikes, Houthi military spokesman Yahya Saree said in a statement carried by the rebel's Saba news agency on Saturday.

The Houthis are now closing in on the oil and gas-producing region, the internationally-recognised government's last major stronghold in the north of the country, after a more-than-year-long push to capture the area. They already control areas just west of Marib city, and the newly captured districts represent a new strategy of approaching the city from the south, with Rahabah only 50km away.

Capturing Marib city would expose oil production facilities operated by state-owned Safer, 65km to the east along the N5 highway. These include a central processing unit that connects oil and gas fields in Safer-operated block 18, once Yemen's most prolific oil-producing block. Prior to the outbreak of the civil war in 2014, Safer was producing around 2,4bn ft³/d (24.7bn m³/yr) of natural gas, 40,000 b/d of crude and 28,000 b/d (880,000 t/yr) of LPG from the block, the firm says.

Marib also hosts a 10,000 b/d refinery, a power plant and one of the country's few LPG bottling plants. Safer currently produces around 90pc of Yemen's LPG consumption — of just over 400,000 t/yr, Argus data show — which is primarily used for cooking in households.

Currently, associated gas from block 18 is being reinjected to maintain reservoir pressure. It had previously provided feedgas for Yemen LNG with a pipeline extending down to liquefaction facilities at the southern port of Balhaf, as well as an oil pipeline traveling west to the Houthi-controlled Ras Issa terminal on the Red Sea. Yemen LNG is an international and Yemeni consortium led by France's TotalEnergies.

Success in Marib may convince the Houthis to push for further territorial gains, including Shabwa, another key oil and gas province not far from the two newly captured districts.

Australian-oil firm Petsec operates the An Nagyah field in Shabwa, which is out of action, but could produce as much as 20,000 b/d. The field is connected to the Marib-Ras Issa pipeline, but production has been shut in since 2015 due to the Saudi-coalition embargo on lifting from the Red Sea terminal.

A new pipeline was built in 2020, which will eventually allow An Nagyah oil to flow south to the Nushaimah export Terminal at Bir Ali for export. Flows will depend on the restart of production from Bock 5, which is expected in the fourth quarter of 2021, Petsec said at the end of August.

The company plans to produce up to 5,000 b/d which will be trucked to the pipeline, and then increase output once the new pipeline is commissioned. Houthi success in Marib would make the restart unlikely.

Yemen LNG is another flashpoint, although this time not because of the Houthis. Tension has been growing between the Shabwa government – which is dominated by the Islah party, a Sunni Islamist group with ties to the Muslim Brotherhood, and the UAE, which controls part of the 6.7mn t/yr LNG plant at Balhalf.

The government hopes sustained crude output could enable gas flows to resume to Balhaf. The Shabwa government is eager to restart gas exports from the, but part of the plant hosts a military base for UAE-led operations in southern Yemen.

Any attempt to forcibly take over the plant by the Shabwa government could result in damage to the plant. To prevent this, a Saudi delegation travelled to the area to mediate between the two forces at the end of August, but so far, the Emirati forces remain in place.

By Adal Mirza