Kuwait and Saudi Arabia agreed that any resumption of crude production from shared oil fields along their border won’t raise their output beyond limits set at the OPEC meeting last week, according to Bloomberg.
Saudi Arabia and Kuwait will cut output from their producing oil fields to allow for any increase from the Wafra and Khafji fields between the two countries, said Bloomberg sources. The countries have yet to agree on a specific time to restart the shared fields. Kuwaiti and Saudi government officials declined to comment on the matter.
OPEC’s three largest producers — Saudi Arabia, Iraq and Iran — overcame discord to reach last Wednesday’s pact to reduce the group’s output by 1.2mn barrels a day starting January 1. Saudi Arabia agreed to cut its output by 486,000 barrels a day and Kuwait by 131,000 barrels a day from October levels.
Saudi Arabia produced 10.53mn barrels a day and Kuwait 2.95mn barrels a day last month, according to data compiled by Bloomberg. Both countries hold equal shares of production and reserves at Wafra and Khafji, which have a combined output capacity of more than 500,000 barrels a day.
Kuwait’s deputy prime minister, finance minister, and acting oil minister, Anas Al-Saleh, and Saudi Arabia’s energy minister, Khalid Al-Falih, agreed at a meeting in Kuwait last month to resolve many of the environmental and technical issues behind the shutdown of the fields, one official said. Saudi King Salman is to visit the Kuwaiti ruler later this week.
The onshore Wafra field, where Chevron Corp. operates on behalf of Saudi Arabia, closed in May 2015 because of difficulties in securing work permits and access to equipment. The offshore Khafji deposit is run by Khafji Joint Operations, a Saudi-Kuwait joint venture, and closed in October 2014 because of unspecified environmental concerns.
“We are encouraged by efforts underway by all appropriate parties to resolve the issue,” Sally Jones, a Chevron spokeswoman in London, said according to Bloomberg. “Production will remain shut in until the situation is resolved.”
Bringing output at Khafji and Wafra to the same levels reached before they were shut down will take more work, official news agency KUNA reported this week, citing Jamal Jaafar, chief executive officer of state-run Kuwait Oil Co.
