Chevron told to move amid Kuwait-Saudi Arabia dispute

29 October 2014

Kuwait says it wants to build part of its Al-Zour New Refinery on US company’s site

Kuwait has told US oil company Chevron to clear out of its offices in the neutral zone town of Mina al-Zour amid increasing tensions between Kuwait and Saudi Arabia.

Kuwait believes the land was leased to Chevron by Saudi Arabia without the approval of Kuwait and it wants to build part of its Al-Zour New Refinery complex on the land, according to a senior Kuwaiti official, who spoke to the Wall Street Journal under condition of anonymity.

Chevron staff have been refused work permits as part of the dispute.

The neutral zone is an area of 5,770 square kilometres between the borders of Saudi Arabia and Kuwait, which was divided between the two nations in the 1960s and has been the source of numerous political spats due to its significant oil reservoirs.

The request for Chevron to move out of its Mina al-Zour offices comes after the Al-Khafji offshore fields in the neutral zone were shut down on 16 October.

Kuwaiti officials have denied the shutdown is due to political reasons.

“The stoppage of production at Al-Khafji in the divided zone with Saudi Arabia was for purely technical reasons and not political,” Khaled al-Jarallah, Kuwait’s foreign ministry undersecretary, told state news agency Kuna.

While Kuwaiti officials have said the land occupied by Chevron is needed for the construction of the new Al-Zour refinery, under current plans, the land is not slated to be built on as part of the development, according to sources working on the scheme.

“The original location for the refinery was directly next to Chevron’s camp area,” says one senior figure with knowledge of the plans.

“It was decided to be relocated because it would have too much of an impact on the Saudi Aramco-Chevron joint operations work. It was then moved about three kilometres south along the coast to its current site location.”

Plans for the Al-Zour refinery are currently in flux due to the announcement of the integration of a multibillion-dollar petrochemicals plant earlier in October.

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