OMV Company to Lay Off Staff to Mitigate Consequences of Oil Exports Cessation

Sheba Intelligence | 2023-09-05 03:45 PM UTC


The Austrian OMV company operating in Shabwa province in South Yemen will lay off two hundred employees starting next year, 2024, a local source told Sheba Intelligence. This workforce reduction comes in line with the continued cessation of oil exports since last year. 

According to the source, the company has not achieved revenues from its activities in Block S-2 in Shabwa province because of the total cessation of oil exports and sales over the last ten months.

The source added that the downsizing of the workforce is an attempt to reduce the ongoing massive financial losses and avoid the complete shutdown of its activities in Block S-2. 

Some hours ago, Sheba Intelligence ran a report on the termination of an agreement between Zenith Energy Ltd. and OVM Yemen. 

Early this year, Zenith announced that it entered into a share purchase agreement with OMV Exploration and Production GmbH to acquire 100% of the outstanding share capital of OMV (Yemen Block S 2).

 However, Yesterday, Zenith terminated the share purchase agreement ("SPA") with OMV Yemen. It explained the reason for its resolution, saying, "the conditions required for completion of the SPA not being satisfied."

Bock S-2, situated in the Erma District of Shabwa province, was declared commercial in 2005 by OMV. Before the breakout of the war in Yemen in 2015, the oil production in Block S-2 was 14000 barrels per day. The production ceased after the conflict intensified. It resumed operations in 2018, producing 17500 barrels of oil per day. Since last year, oil production declined as oil exports stopped due to the Houthi attacks on oil ports in Shabwa and Hadramout in South Yemen.