Ongoing talks on fate of oil aboard ‘Safer’ should not delay progress, UN says

Oil prices lower, currency stronger since Yemen truce began, says David Gressly

David Gressly at a press conference to discuss the humanitarian situation in Yemen in October 2021, in Geneva. AFP

David Gressly, the UN's Resident and Humanitarian Co-ordinator for Yemen, is touring the Gulf to mobilise $80 million in funds desperately needed to replace the oil tanker FSO Safer.

The “floating time bomb” was moored in the Red Sea off the coast of Yemen in 2015 and has remained there unmaintained since Houthi militias took control of the coastline. Experts fear the vessel's deteriorating hull could be breached by corrosion, causing a devastating oil spill or that gases building up in its chambers could cause an explosion.

The fund-raising is part of a wider effort to ensure that a UN-brokered plan to offload the 1.1 million barrels of oil aboard Safer takes place before September when the seasons change and currents are especially strong, making the ship’s deterioration more likely.

It comes weeks into a truce declared between the Houthi rebels and the Yemeni government and its coalition partners which began on April 2.

As part of the plan, a temporary ship would contain the barrels of oil, as the Safer is cleaned then taken off the water, while a longer-term replacement is secured - a process which could take 18 months.

In the meantime, another complex issue is being discussed, the fate of the oil.

“There are a lot of issues over selling the oil — the question of who owns it and the quality of it, how valuable it is or not,” Mr Gressly told The National.

“Any sale of the oil will require clearance from the [Saudi] coalition, the government of Yemen and the authorities that control the vessel in Sanaa.”

However, Mr Gressly said these talks cannot pause the operation to eventually dismantle and replace Safer.

“We cannot wait for those discussions to conclude before safeguarding the oil in a temporary vessel.”

There are several options as to what would happen to Safer itself, which, as a Floating Storage and Offloading (FSO) vessel is obsolete.

“It has a good scrap value. The company that we are working to contract this with would clean up the vessel so it’s ready to be towed for salvage. We are looking at how this could offset costs for a replacement vessel,” Mr Gressly said.

However, for now, there have been no solid agreements as to what will happen to either the oil or the vessel.

Procuring a temporary ship to contain Safer’s oil barrels is in its “final stages,” Mr Gressly said, noting that the $80m required for the operation has yet to be raised although the prospects look promising.

All of this, however, is not enough if the agreement reached between the Houthis and the UN is not met.

“In order to gain the confidence of the authorities in Sanaa, their expectation that the FSO will be replaced, so we need to focus on the temporary [ship] but especially the replacement in order to continue to secure their co-operation. Without that, we might find the obstacles we have in the past.”

“So while we may want to focus on getting the $80 million upfront, it can’t be the end of the effort and we can’t act like that’s the end of our objective.”

‘We don’t want to give assistance forever’

The impact of a UN-brokered truce that went into effect on April 2 was almost immediate.

Mr Gressly said Yemen's soaring fuel prices have already gone down with the influx of fuel through the port of Hodeida, and the currency has strengthened in southern parts of the country.

“The truce offers opportunities in helping the business environment. A large part of the reason for the humanitarian crisis is the collapse of the economy.”

Businesses have a hard time operating in Yemen's economic climate even without the massive costs imposed by years of war. Imports are very expensive and have become even higher with the war in Ukraine.

“You have a perverse system of reduced incomes and higher prices and this pushes people into food insecurity,” Mr Gressly said.

“We don't want to give humanitarian assistance forever and the way to get out of that is to fix the economy and reinforce the truce over time.”

After Yemen's first truce in six years, more fuel imports are on the way and Sanaa airport is also expected to reopen, amid growing unity in the government's ranks.

UN Special Envoy Hans Grundberg has said he hopes the truce will “give Yemenis a necessary break from violence, relief from the humanitarian suffering, and most importantly hope that an end to this conflict is possible.”

Whether the ceasefire can extend to all of those scenarios, and the salvaging of FSO Safer, remains to be seen.