Kuwait and Saudi Arabia to restart Neutral Zone fields

05 December 2016

Reports claim Al-Khafji and Wafra production could restart by March

Saudi Arabia and Kuwait are expected to agree to restart production from oil fields in the Neutral Zone between the two countries, according to reports.

The two countries are set to agree by the end of the year to revive production, but the ramp-up of output is not expected until March at the earliest, according to news agency Reuters, which cited industry sources.

The Al-Khafji field, which had been producing almost 300,000 barrels a day (b/d), was shut in October 2014, citing environmental reasons, while Wafra has been closed since May 2015 on operating difficulties.

Al-Khafji is operated by Al-Khafji Joint Operations Company, a joint venture of Kuwait Gulf Oil Company and Saudi Aramco subsidiary Aramco Gulf Operations Company (Agoc).

The Wafra field, which is operated by US-based Chevron on behalf of the Saudi government, has the capacity to produce 220,0000 b/d. Crude production from the two fields is equally divided between Kuwait and Saudi Arabia.

The potential start-up comes after Opec agreed to cut 1.2 million b/d of production in order to reduce global oversupply.

Saudi Arabia agreed to reduce production by 486,000 b/d, while Kuwait must find 130,000 b/d of cuts.

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