Oil production from Saudi and Kuwait Divided Zone to restart this year

17 July 2018
Meetings between the two countries resolved disagreements

Oil production in the Divided Zone, which is shared by Saudi Arabia and Kuwait, could restart before the end of the year.

Kuwaiti Oil Minister Bakheet al-Rashidi is expected to meet his Saudi counterpart, Khalid al-Falih, in November to declare the resumption of production, according to a report in Kuwait Times that cited anonymous sources.

Meetings between officials from Saudi Arabia and Kuwait helped resolve disagreements, the sources say. 

The latest reports follow a statement from Japan’s Toyo Engineering, which announced that Saudi Arabia and Kuwait were set to resume Divided Zone oil production in 2019.

In a statement, it said: “because of oil price recovery, KJO [the operator] starts the preparation work to reproduce the oil from the fields from 2019”.

Toyo Engineering also said it had renewed a contract for work on the fields. 

Production was halted at the Khafji and Wafra fields in October 2014 and May 2015 respectively. The stoppage at Khafji was officially blamed on technical problems. Contractors blamed the stoppage at Wafra on difficulties in securing work and equipment permits due to a political spat between Kuwait and Saudi Arabia.

If oil activities restart in the region it could add hundreds of thousands of barrels a day (b/d) to global production, at a time when the US president Donald Trump is urging its allies in the Middle East to increase production in order to lower global oil prices.

The return of oil activities in the region could also see the revival of projects worth billions of dollars.

The stoppage of oil activities in the region forced the cancellation of a planned field development project called Wafra Joint Operations Heavy Oil, which was cancelled before the front-end engineering and design (feed) was completed. The project was being developed by Chevron in cooperation with Kuwait Gulf Oil Company (KGOC).

The first phase of this project was estimated to be worth $5bn and had a planned design capacity of 100,000 (b/d).

Another scheme that was being developed jointly by Chevron and KGOC, known as the Central Gas Utilisation Project, was also cancelled due to unresolved operational issues.

This project was estimated to be worth $1bn and would have collected gas that was flared at the Wafra Field.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications