UN discusses possible escrow account for sale of 1.1m barrels of oil on ‘FSO Safer’

The Iran-backed Houthis have been preventing access to the decaying ship for years

The deck of Yemen's 'FSO Safer', which has not been maintained for years. Photos: IR Consilium

Corrosion in the boiler system. The severity of the ship's physical deterioration remains unclear.

The vessel has been called a 'ticking time-bomb' as gases are building up in its chambers.

The ship's corroded auxiliary utility system.

The external piping system broke down on April 22, 2019, leading to an oil spill.

The vessel lacks a functioning cathodic system to protect it from corrosion.

The leaky vessel still contains 1.1 million barrels of oil.

The hull of the 'FSO Safer', which could be sold for scrap.

The UN has discussed with the Houthis the prospect of creating an escrow account for the sale of 1.1 million barrels of oil aboard the decaying FSO Safer supertanker, Humanitarian Co-ordinator for Yemen David Gressly told The National on Sunday.

In an exclusive interview on the sidelines of the first Yemen International Forum in Stockholm, Mr Gressly said the Houthis “were not opposed to the concept, but were not ready to act on it yet”.

The event was organised by the Sanaa Centre for Strategic studies in collaboration with the government of Sweden.

The FSO Safer is a vessel connected via pipeline to the oil-rich city of Marib, and is moored off the coast of Ras Issa in the Red Sea. At the mercy of the elements, the corroding ship has been unmaintained since at least 2016 and poses a grave environmental threat to Yemen and other countries such as Saudi Arabia, Eritrea, Djibouti and others, if the oil leaks or the vessel explodes.

The UN has signed a Memorandum of Understanding with the Houthis to offload the oil on to a temporary vessel in an emergency operation. After that is done, the plan is to replace the Safer with a permanent vessel. The Houthis said they will not make financial contributions to this plan.

Ownership versus control

“My engagement in Sanaa tells me clearly that the Houthis are concerned about the oil spilling, so they have an interest in securing it. If we could sell the oil, we would have sold it, but because of complications of control versus ownership, it’s not possible right now,” Mr Gressly said.

Technically, the oil belongs to Yemen’s national SAFER Exploration and Production Operations Company. But since the Houthis possess control of the area where the ship is located, they have been monopolising access to the vessel sought by the UN and technical inspectors for years.

Sea mines also surround the area where the Safer is moored. Mr Gressly hopes a peace settlement could be reached through the continuing UN-brokered talks in Amman between the warring sides.

“The political process might assist in figuring out the oil situation. If there’s a settlement, one would expect this issue would be resolved at the same time. So we have to see how the future plays out,” he said.

Mr Gressly’s main focus for now is to raise the $20 million remaining to cover the emergency operation’s cost of $80m, which he was hoping to do by the end of this June.

Earlier this month, the UN set up a crowdfund to raise $5m towards that goal.

“We don’t expect the crowdfunding to bridge the $20 million gap — even $5 million will be a bit of a stretch as well but it’s a way not only to get contributions but to also raise global awareness of the problem.”

“Most of the systems aboard the ship have broken down. This includes a key system to pump inert gas into the oil chambers. Atmospheric oxygen is now in those chambers and so a small flame could set off an explosion.”

Time is of the essence in this operation because as the currents and winds get stronger and more turbulent in winter, the chances that the Safer breaks up or suffers from an oil spill become higher, Mr Gressly said.