Yemen: a solution in sight for the environmental threat of the FSO Safer

Summary: with time running out and autumn storms ahead action is finally happening to offload more than 1 million barrels of crude from a derelict ship moored in the Red Sea but big oil needs to step up and use their recent massive windfall profits to cover a donor shortfall.

We thank Helen Lackner for today’s article. She has worked in Yemen since the 1970s and lived there for nearly 15 years, and writes about the country’s political, social and economic issues. Helen works as a freelance rural development consultant and is a visiting fellow at the European Council for Foreign Relations. She is the author of Yemen in Crisis, the Road to War published by Verso. It’s a seminal study of the current war and what lies behind it and a revised edition with additional material is coming out shortly. On 15 July Routledge will publish her new study Yemen: Poverty and Conflict. Helen’s most recent Arab Digest podcast ‘Yemen, a ceasefire and reason to hope’ is available here.

Amazingly, since we last discussed the problem of the Safer FSO [Floating Storage and Offloading] in our posting of July 2020, the ship has neither sunk nor exploded. Everyone should be thankful for this non-event, though not for the fact that so little progress has been made in solving this potential catastrophe.

The FSO Safer is moored about 8km west of Ras Issa on the Red Sea Coast, north of Yemen’s main port of Hodeida. It was the storage and offloading facility for exports from the Marib oil field, which is located at Safer, east of Marib city, hence the highly ironic [in English] name of the facility. Since the war started in 2015, exports from Safer have stopped, and the facility has been left without maintenance or insurance, but with a cargo of 1.1 million barrels of crude oil [4 times the quantity of the notorious Exxon Valdez spill]. At any moment it might leak or explode as basic protection measures stopped operating long ago, including the pumps, the fire fighting equipment and the inert gas system. The ship is staffed by a small crew of less than 10 Yemenis who are heroically risking their lives daily to provide what little maintenance they can in the absence of financial and technical support, and therefore save the region from a catastrophe. In May 2020, they patched up a leak which could have been disastrous.

FSO Safer

The severity of the potential disaster varies according to the weather conditions under which it might happen. It ranges from the minimum danger which would affect Hodeida city, the Yemeni marine and coastal environment and fisher communities to the worst catastrophe which would involve major damage both south and north of the site, way into Saudi Arabia and all the way across the Red Sea, affecting the coasts, the environment, and the livelihoods of millions throughout the region, as well as the marine routes to the Suez Canal. Despite the urgency and seriousness of the potential disaster, the problem has remained unsolved for the past 7 years. Aside from the cost of the operation and responsibility for financing it, the main reason has been the inability of the Houthi regime (which controls the ship and the area) and Yemen’s Internationally Recognised Government (IRG) to agree on a replacement facility and allocation of the proceeds from the sale of the oil. (The oil’s commercial value is debatable after 7 years in storage under bad conditions regardless of current high oil prices.)

In recent months, progress has finally been made. First the UN, which has been involved in negotiations for many years, finally gave a single individual and agency full responsibility for addressing the matter within its structures. David Gressly, the Resident and Humanitarian Coordinator in Yemen, has actively addressed the problem and the UNDP (United Nations Development Programme) is to implement the  plan. After many months of negotiations, on 5 March 2022, a Memorandum of Understanding was agreed between the Houthi movement [officially Ansar Allah], the UN and the private sector import group Fahem, the latter being the second largest importer of wheat to Yemen and a major user of the Red Sea ports of Hodeida and Saleef which would be directly affected by a major Safer related disaster.

The MOU says that the UN will provide a replacement temporary vessel to which the oil will be transferred and will remain at the same site and that, within 18 months, a permanent replacement vessel will replace the FSO Safer. Most importantly for the Houthis it says they would have ‘no financial obligation’ in this matter. This left the UN to raise financing for the operation. The Netherlands government has also been deeply involved and a Dutch company has been contracted by the UN through a fast-track mechanism to implement the first urgent phase. The entire operation is costed at US$ 144 million. The first four months phase, to avert the immediate threat includes leasing of a replacement vessel to which the oil will be transferred and the salvage operation. The plan was to start the process by 1 June; this has been delayed by insufficient financing.

Following Gressly’s fund raising visits to a number of capitals, a pledging conference was held on 11 May calling for US$ 80 million to cover the first emergency phase of the operation, but only US$ 33 million was pledged, including Qatar as the only GCC state contributing while most pledges were from European states. In June the US and Saudi Arabia each contributed US$ 10 million. By 13 June, US$ 60 million had been raised, three quarters of the amount needed to start work. Given sequencing of activities, the full amount is necessary before starting and time is running out to complete the work before the season of high winds and increased risk of a spill starts in October. In an unusual initiative, the urgency of the situation led the UN to launch a crowd funding campaign on 14 June to raise US$ 5 million. While individuals are invited to donate, this is presumably targeted primarily at the private sector as well as state-owned and private hydrocarbon corporations.

While US$ 144 million, or US$ 80 million for the first phase, may seem expensive, it is insignificant compared to the price of the potential disaster. The clean-up of the spill alone would cost US$ 20 billion, excluding disruption to shipping, damage to eco-systems, tourism, desalination plants, fisheries and more. Millions of people would suffer serious medical problems from air and soot pollution, as well as losing their livelihood for lengthy periods. Compared with the obscene profits of big oil, the amount is trivial: BP  alone has made US$ 6.2 billion profits for the first three months of 2022, Shell US$ 9.1 billion. As pointed out by Greenpeace, in its May 2022 briefing: “the average oil industry profits for 3 months are over 90 times the amount needed to salvage the Safer and save people and the environment in the Red Sea region.” For these companies to provide the US$ 20million needed, and the further US$ 60 million for the entire operation would cause something less than a blip on their account sheets.

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