According to industry sources, Yemen relies heavily on imported gasoline as its ailing refining sector struggles to meet soaring domestic demand. So the country is trying to encourage investment from Indian companies like RIL and ONGC for new exploration across the country. At present, Reliance has a partnership with private sector Yemeni firm Hood Oil to build a 50,000 bopd refinery at the Red Sea port of Ras Issa with an option to double this with a product mix of petrol, diesel, aviation turbine fuel, kerosene, liquefied petroleum gas and benzene.
Indian companies like ONGC and RIL will go ahead with the project only if they get an exploration block in the West Asian country which would be more viable for the companies to invest a huge amount in a refinery outside, said a Mumbai based oil and gas analyst.
RIL has already established a substantial presence in exploration and production of crude in Yemen, some of which is imported as feedstock for its Jamnagar refinery. This is from onshore fields of Block 9, also known as Malik, which Reliance has explored and developed also with HoodOil and Calvalley Petroleum Inc, Canada. Reliances share of crude from Malik is in proportion to its equity holding which is 25%, while Hoodoil and Calvalley hold 25% each. The block is projected to yield 8,000 barrels per day and expected to go up to 18,000 barrels per day when fully exploited.
RIL will increase its equity holding to 50% in Yemens Ras Issa refinery that is being set up by a start-up- the Ras Issa Refinery Companyin which Hoodoil, part of the Hayel Saeed Aman Group, the largest Yemeni group, holds 50% equity. RIL had earlier decided to take a 25% stake, for $33.78 million, in the Ras Issa refinery, whose stock is worth around $450 million.
RIL has stake in two onshore oil blocks, 34 and 37, in Yemen where it is partnering HoodOil. Both blocks measure 7,500 sq km each and are located along the border with Oman.