SANAA, Aug 25: The Yemeni government's share of oil output declined by 42 percent in the first half of this year, posing a challenge to the country's economic growth, a senior official said on Saturday.

The government's share of total oil production fell to 20 million barrels in the six months to June 30 from 34.5 million barrels in the year-earlier period, Prime Minister Ali Mohammed Megawar said.

The value of oil production fell to $1.2 billion in the period from $2.2 billion last year, Megawar told a meeting of the ruling People's Congress Party.

The decline in oil production in Yemen is a real challenge to the national economy although there are positive indicators promising new discoveries of oil and gas, Megawar said.

President Ali Abdullah Saleh said at the same meeting that Yemen's oil production stood at 300,000 barrels per day (bpd).—Reuters