Zenith Energy Ltd. Makes Historic Acquisition in Conflict-Ridden Yemen Despite Unrest

Cairo : On Tuesday, Zenith Netherlands, a subsidiary of Zenith Energy Ltd., struck a deal to acquire energy assets of Vienna based OMV in Yemen for more than USD 21.6 million. This purchase is significant for the global energy company, according to CEO Andrea Cattaneo, as it positions them on an exciting organic growth trajectory due to existing production and near-term future oil and natural gas production. The situation in Yemen is turbulent, as Houthi rebels have been attempting to prevent rivals from exporting oil by targeting terminals and tankers. Despite this unrest, the acquisition is still subject to approval by authorities in both Yemen and Austria; so far there has been no immediate statement from Yemen's internationally recognized government.

OMV's largest asset is its shares in the al-Uqlah oil field, located in central Yemen and controlled by the internationally recognized government. This purchase was announced by Zenith Netherlands in mid- 2021. According to the announcement, production from this field was reduced from 15,000 barrels per day before the civil war to just 6,000 barrels as of January 2022 due to a lack of drilling activity.

Additionally, OMV announced the sale of their shares in two smaller central Yemen fields, accompanied by an estimated 571 billion cubic feet of recoverable gas. The war in Yemen was sparked four years ago when Houthi rebels moved from the north and seized control of Sanaa, displacing the internationally recognized government to Saudi Arabia. By the next year, a coalition led by Saudi Arabia had entered and sought to uproot the Houthis.

As one of the largest international energy companies still operating in Yemen, OMV announced in June that they would be selling off their assets and scaling back their oil operations. As a result, their production in the energy-rich province of Marib had decreased by 15%.

After the warring parties failed to extend a UN-brokered truce in October, the rebel forces have become increasingly active in their efforts to disrupt oil terminals and energy firms working in Yemen so as to inhibit oil exportation from the internationally recognized government. First, they successfully attacked an oil tanker owned by Athens-based Okeanis Eco Tankers Corp. off an oil terminal controlled by the government with a drone attack in October. Then, following that up with another drone attack on an oil vessel found in Yemen's southern region in November. The US Energy Information Administration reported that Yemen is home to approximately 3 billion barrels of oil and 17 trillion cubic feet of gas, making it one of the poorest countries throughout the Arab world.