EXPLOSION OF OIL PIPELINE NEAR MARIB

C O N F I D E N T I A L SANAA 002055 SIPDIS SIPDIS NEA/ARP FOR NATASHA FRANCESCHI DEPARTMENT PLEASE PASS TO OPS CENTER E.O. 12958: DECL: 11/06/2017 TAGS: ECON EINV ENRG EPET PGOV PREL PTER YM SUBJECT: EXPLOSION OF OIL PIPELINE NEAR MARIB REF: A. IIR 6 906 0015 08 ¶B. SANAA 1347 Classified By: Ambassador Stephen Seche, for reasons 1.4 (b) and (d) ¶1. (C) An oil pipeline explosion occurred at approximately 0500 AM on November 5 in the Watada area, southwest of Sirwah Disrict in the area bordering al-Kholan and al-Bida tribal areas in the Ma'rib Governorate (ref A). According to media reports, there were no casualties. The explosion shut down the pipeline between the Safer Marib Block 18 oil pumping station and the Ras Issa terminal on the Red Sea, which comprises 40 percent of Yemen's oil supply. (Note: Safer is a ROYG-owned oil company. End Note) ¶2. (C) Jannah Hunt Oil Finance Officer Steve Margerum told CommOff that when pipeline explosions occur, oil companies usually "shut-in" production, meaning that they either stop pumping oil or put oil into barrels. He said that oil production was stopped for a short period on November 5, but afterwards it was being diverted into tanks. According to Margerum, the total daily loss of oil due to the pipeline explosion was at least 5,000 barrels, but some estimates may be higher. Despite repeated attempts, Post was not able to reach the Safer Company. ¶3. (C) There is widespread speculation about the cause of the explosion. A ROYG Ministry of Interior official told the RSO on November 5 that the main cause was a "construction accident." Contacts explained that the explosion was tribe-related. (Note: Yemeni tribes have in the past disrupted oil supplies and production in order to extract more money or jobs from the oil companies (ref B). This has been a frequent occurence in several governorates, including Shabwa and Marib. According to reftel, a hole was found under the pipeline in the al-Bida area a few days ago. Some sources expect that the al-Bida tribe was behind the pipeline explosion. End Note) SECHE