Saudi Arabia and Kuwait discuss resumption of Neutral Zone oil production

25 January 2017

Khafji field has been shut since 2014

Discussions on the resumption of oil production from the Neutral Zone between Saudi Arabia and Kuwait took place on the sidelines of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee meeting in Vienna on 22 January, according to Kuwaiti oil minister Essam al-Marzouq.

Speaking to reporters on the sidelines of the Petroleum Economist GCC Strategy Forum in Kuwait, he said discussions had been held with Saudi oil minister Khalid al-Falih on production from the Khajfi oil field, which lies in the Divided Zone.

He did not specify a timeline for resumption.

The Khafji field was producing 300,000 barrels a day (b/d) before being shut in October 2014 due to environmental reasons. The Wafra field, which also lies in the Neutral Zone, was closed in 2015 due to operating difficulties.

In December 2016, news agencies reported a possible revival of production from the Neutral Zone, with a ramp-up of output expected in March 2017.

The Neutral Zone is the only concession in both countries where international oil companies can take equity in the fields they operate in.

Both Kuwait and Saudi Arabia committed to lowering their output for six months starting January as part of an Opec agreement to balance crude inventory levels and stabilise oil prices.

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