Yemen's economy is on the edge of collapse due to deepening financial problems which are mostly blamed on repeated attacks on oil infrastructure.
This past year, the authorities reported around 18 attacks on the main Marib pipeline alone. All attacks resulted in production disruptions at Marib and Shabwa oilfields and that in return has been reflected on budget deficit and fund shortages.
The national economy depends largely on oil revenues which account for around 70% of the budget resources.
The latest attack on this main pipeline was on November 26th. It left a hole on the pipe where crude has been leaked for more than a month. According to a report from the oil and minerals ministry, the pipeline has leaked around 52.000 barrels so far.
The leak is continuing because local tribes have allegedly been preventing the authorities from fixing the damage until now. An official at the ministry said the financial losses from the leak have been estimated at more than $2 million. "We did not shut down the pipeline despite the leak because financial problems could worsen," the official said.
The authorities also reported attacks on other main pipelines in Hadramout and Shabwa governorates and attacks on sub-pipelines in Marib governorates. Moreover, Yemen LNG reported few failed rocket attacks on the Balhaf Liquefaction Facility, the latest was in December, but the company's operations were not affected.
Throughout 2014, the Central Bank of Yemen continued to post drops in oil exports and revenues blaming acts of sabotage against oil infrastructure.
In October, the Bank said the crude oil exports dropped by 7 million barrels and revenues by $800 million year-on-year.
The drops add to other problems including technical ones at producing blocks and all have been blamed for the continued fall of crude output from around 500.000 b/d in 2004 to less than 150.000 b/d this year.
One of the key impacts of acts of sabotage against the crude infrastructure is the drop in domestically consumed oil output; the drop has been forcing the authorities to import fuels. The fuel import bills in the past few years exceeded the country's revenues from oil exports. By October, the fuel bill reached $1.771 billion while the oil export revenue was $1.455 billion, according to the Bank.
In general, the government has lately revealed that Yemen losses from attacks on oil infrastructure exceeded $4 billion in three years.
Yemen's economy is also suffering due to widespread corruption at public offices, structural problems at key sectors, lack of visions to develop non-oil sectors and conditional and delayed donor aid.
Meanwhile, officials revealed the country's energy and power infrastructures have been subjected to systematic acts of sabotage in which military and security officials have been deeply involved.
A military official in Marib said tribes don't know where the pipeline is buried underground which means either officials plotted through guiding tribal saboteurs to the pipe place or officials committed attacks themselves.
The Marib pipeline starts in Marib, passes through the capital city of Sanaa and ends at the Ras Isa Terminal in Hodeida governorate. In some areas, parts of the pipeline are on the ground and can be attacked easily.
"However, the army must be on alert in these areas. In all cases, repeated attacks on the pipeline point to involvement of officers," the military official said on condition of anonymity.
According to an official from the oil ministry, the pipeline was placed three meters underground.
In addition, security concerns have forced around 34 oil and gas firms to leave the country in recent years, the government said lately.
In this context, Al-Qaeda threats and the Houthi Group's takeover of the capital Sanaa and its acts including seizures of and raids on compounds of firms add to security challenges.
Last month, Nexen shut down its operations on Block 51 citing security concerns. The shutdown coincided with reports about Al-Qaeda threats to target oil and gas firms including Total. Also, Occidental shut down its headquarters in Sanaa after gunmen stormed it. But a source said the US company which operates Block S1 did not suspend operations on the block.