Sana, North Yemen
Oil again is changing the political map of the Middle East - this time in the two Yemens. New oil production and undeveloped discoveries promise the countries hundreds of millions of dollars in oil revenues and reduced dependence on their foreign patrons. But the new-found mineral wealth is also fanning long-standing border disputes. The region in the southwest corner of the Arabian Peninsula, known for millennia as Yemen, was first divided in 1900 by Britain and Turkey. Achieving independence by the 1960s, the Yemen Arab Republic [North Yemen] and the Peoples Democratic Republic of Yemen [South Yemen] have often been at armed loggerheads.
They were again on the brink of war last month, ministerial sources in North Yemen say, this time over undemarcated territory straddling the no man's land between newly delineated oil fields in North Yemen's Marib region and, 100 miles southeast, South Yemen's Shabwa area. Both sides believe that the disputed area contains oil deposits equally rich to those on each side.
A truce, struck three weeks ago, defused the latest crisis, although its durability remains uncertain. The two governments declared some 2,200 square kilometers (850 square miles) of the disputed area a ``joint economic zone,'' whose oil potential would be explored and developed cooperatively.
North Yemen's oil was found in 1984 by a United States firm, Hunt Oil Company of Dallas, in the eastern desert, embarrassingly close to the provisional border with Saudi Arabia.
Last December, Hunt inaugurated a 263-mile export pipeline with a 225,000-barrel-per-day capacity, expandable to 400,000 b.p.d. Reservoir problems still constrain production to 180,000 barrels per day, but production has risen steadily and North Yemen hopes for full output shortly.
Even at current levels, oil exports are worth one billion dollars per year, several times higher than the total annual financial aid North Yemen receives from Saudi Arabia. The potential is to largely emancipate North Yemen from Saudi subsidies.
Saudi Arabia's policy in North Yemen had long been equivocal: Its aid since 1970 has covered North Yemen's government deficits, supporting this conservative, Muslim, and anti-Marxist state as a buffer against the Soviet's presence in South Yemen. But it feared any cohesion among North Yemen's 9 million population or its tough, experienced guerrilla fighters.
Saudi Arabia has now reiterated old border claims spanning the new oil fields. A map just published in Riyadh includes most of the Hunt Oil area, a claim reinforced by boundary cairns placed many miles west of the current de facto border.
South Yemen, too, since the late 1960s a starkly impoverished stipendiary of the Soviet Union, is poised for greater independence, thanks to its own oil bonanza.
Techniexport, a Soviet firm, found oil last year at Shabwa, claiming some four billion barrels of reserves in the very first discovery. However, Western oil executives don't view that volume as credible until the field is further delineated through additional drilling.
In spite of blunt and acerbic complaints about Soviet competence, a pipeline to the coast is under way, and crude oil in the meantime is being trucked to the ancient, nationalized British Petroleum refinery in Aden.
Once the export earnings begin, South Yemen's oil revenues will be many times larger than the reluctant Soviet subsidies. Though that will reduce Soviet leverage, South Yemen's joining the ranks of oil exporters may benefit the Soviets. Not only can they expect to receive construction and development contracts, but South Yemen may then be asked to repay Soviet arms aid. Like Angola, it may graduate to a ``pay-as-you-go'' status.