YEMEN SETS JULY MARIB LIGHT CRUDE OSP AT PARITY TO DATED BRENT

SINGAPORE, May 11 (Saba)- Yemen has cut the official selling price for its Masila crude lifting in July to a 16-month low of Platts Dated Brent minus 38 cents/barrel, down 18 cents/b from June, industry sources said Tuesday.

The OSP for Marib Light lifting in July was set at a nine-month low at parity to Dated Brent, a decrease of 42 cents/b from June, the sources said.

European trading house Vitol was said to have submitted the highest bid for Masila crude at Dated Brent minus 38 cents/b for half of the 3.6 million barrels tendered for sale, and this sets the OSP.

‘’Yemen will re-offer the remaining quantity in a separate tender to be issued’’, a trader said.

Meanwhile, Yemen's national refinery the Aden Refinery, was awarded the entire quantity of 2.4 million barrels of Marib Light crude for July loading at parity to Dated Brent.

The last low for Masila crude was for cargoes loaded in March 2009 at Dated Brent minus $0.70/b while the last low for Marib Light was for clips loaded in October 2009 at Dated Brent minus $0.48/b.

With first oil production at Masila started in July 1993, there are more than 25 oilfields in this block and further discoveries are expected. So far, the block is said to contain about 1.5 billion barrels of oil reserves in place.

As for the market outlook for July-loading Masila, "the July market may rebound slightly from the previous month," said the trader.

Yemen is still exploring less than 20 percent of structures, confirming that there is high potential of gas and oil, in efforts to raise the country’s profile as an international upstream investment destination.

The monthly sales of crude oil in Yemen are estimated at 4.5-5 million barrels, and oil revenues form three quarters of the state budget resources.

In 2008, Yemen's total oil production was about 300,000 barrels per day. Production has been declining steadily since reaching a peak of 440,000 barrels per day in 2001.

EIA expects oil output to decrease further to 260,000 barrels per day in 2010.

Oil production in Yemen is dominated by a number of international oil companies. All production currently comes from two main sedimentary basins, Marib/ Shabwa and Say'un/Masila, out of a total of 12 basins believed to hold oil reserves.

Al Masila's Block 19 is ranked as the country's highest producer at approximately 95,000 bbl/d, or 32 percent of the total, according to the Ministry of Oil and Minerals.

There are 12 producing blocks operated by 11 oil companies and there are 31 blocks under exploration by 16 oil companies.

In September 2009, Yemen announced that it plans to explore for oil at 42 locations between 2010 and 2015.