Yemen upstream update – new flexibility to win back old friends

Yemen is trying to counter the threat of falling oil production by bringing in more IOCs – with recent changes to the hydrocarbons law intended to entice back the majors, rather than giving new incentives to the minnows who have helped build up its industry. The emergence of export LNG is an added incentive to invest, provided gas-gathering systems and other infrastructure can be efficiently developed. President Saleh is looking to old friends in Russia to help develop such projects, but all participants are welcome during a period when many western IOCs are confronted with financial pressures, and equity stakes will become available as firms seek to cash in their assets.