POLICY BRIEF - Recovering Lost Ground in Shabwa’s Oil Sector

Although the revenues have increased the local authority’s capacity to fund development projects and other priorities in the governorate, most of the major decisions in Shabwa’s oil sector continue to be handled by foreign energy companies and the Aden-based Ministry of Oil and Minerals. [...] In 2018, Shabwa resumed oil production after a near-complete shutdown of Yemen’s sector in early 2015 as the conflict escalated, and the local authority negotiated an agreement with the central government to keep 20 percent of oil revenues generated in the governorate.[2] However, the interests of foreign oil companies and Yemen’s central government continue to dominate the governorate’s oil secto. [...] Among the main outcomes of the workshop[3] was the insight that increased local management and control of the oil sector was a key economic and development priority for the governorate.[4] One of the authors attended a follow-up event in January 2023 where the topic was raised again. [...] In addition to contributing to the instability that led to the shutdown of oil production from 2015- 2018,[54] Houthi forces subsequently advanced into Shabwa in late 2017 and threatened oil infrastructure before being driven out of the governorate in January 2022.[55] In response to incursions by Houthi forces and an expanded Al-Qaeda presence in Shabwa during the early months of the war, the UAE. [...] Farming communities, in central and eastern Shabwa in particular, have been affected by oil leaks that have contaminated their water wells and soil.[74] Maintenance and repair of oil infrastructure is the joint responsibility of YICOM and the Ministry of Oil and Minerals, and repairs are complicated by the fact that both of these entities are in dire financial straits and often unable to perform t.