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Global Energy Advisory – 13th March 2015

Politics, Geopolitics & Conflict

Yemen’s oil-rich Marib province is the likely next target for takeover by Houthi militants who have unseated the Yemeni government. Houthi rebels have taken over much of the country’s north, but Marib—east of the capital—will be more of a challenge. This province is dominated by Sunni tribes who will not let it fall to the Houthis without a major showdown (read: civil war). The Sunni tribes protecting this province (along with military units) will necessarily have some links to Al-Qaeda. Thus, the Houthi militants will profess to be protecting the oil province from al-Qaeda, or more specifically Al Qaeda in the Arabian Peninsula (AQAP). Indeed, no one wants this oil-rich province in the hands of AQAP, which would gain an instant, massive fundraising tool much like their Islamic State brethren have in Syria and Iraq. International oil companies have of course already recognized the coming disaster, though no one is quite sure who to be afraid of in this venue. In January, Houston-based Occidental Petroleum Corp. evacuated its staff because Houthi militants raided its compound in the Yemeni capital. Norway’s DNO, is giving up its right to oil blocks that were very lucrative. So are Dove Energy, Group of Dubai and Nexen Inc. Austria’s OMV hasn’t cut and run yet, but it has evacuated a lot of staff and operations have been downsized. The Houthis are fairly savvy geopolitically. They are now courting the Russians to come in and help them develop their newly seized oil assets. More to the point, they are promising Russia lucrative contracts in return for official recognition of the Houthi-led state. They will offer the Russians Marib province, which they are confident they are going to take by force very soon.

• In Libya, the Islamic State has allegedly kidnapped 9 foreign oil workers from the Ghani oilfield, which lies south of the city of Sirte in the country’s central region. The foreign oil workers were from Austria, Bangladesh, the Czech Republic, the Philippines and Ghana. Nine Libyan security guards were also kidnapped in the operation and are believed to have all been beheaded. There is no information on the whereabouts of the kidnapped oil workers. While the kidnappings have been confirmed, we cannot at this time confirm definitively that IS was behind the kidnappings. There are other alternatives that must be considered in the current atmosphere…




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