Kuwait Gulf Oil Company to sell excess gas from Wafra field

Kuwait Gulf Oil Company, an operator in the Neutral Zone shared by Saudi Arabia and Kuwait, signed an agreement with Saudi Arabian Chevron for the offtake of excess gas, state-run Kuwait News Agency said in a statement on Jan. 10.

KGOC began export of 12 MMcf of excess gas from the Wafra field on Jan. 10, according to deputy chief executive Mohammed al Haimer.

The volumes are expected to reach 40-50 MMcf of gas "in the upcoming months," the statement added.

The onshore Wafra field is one of two fields in the Neutral Zone and is operated by KGOC and Saudi Arabian Chevron.

The offshore Al Khafji field is operated by Saudi Arabia's Aramco Gulf Operations Co.

The excess gas is produced as a result of the ramp-up of crude output in the Neutral Zone.

KGOC has "long and short operating plans" to deliver excess gas from its Wafra operations to state-run Kuwait Oil Company's refineries, al Haimer said.

Output from the Neutral Zone is shared between Saudi Arabia and Kuwait, which ended a political dispute to restart production in 2020.

Crude exports from the Neutral Zone in 2021 have ranged from a low of 153,000 b/d in July to a high of 258,000 b/d in December, Kpler shipping data showed.

The crude has been shipped to India, China, South Korea and Japan with Singapore also taking some cargoes in recent months, according to Kpler.

As the OPEC+ alliance intends to phase out its production cuts by late 2022 and global oil demand rises in the pandemic recovery, the Neutral Zone may be counted on for incremental supply, though Platts Analytics forecasts that output will be capped at 250,000 b/d throughout 2022 due to the operational setbacks.

Output from the two fields has faced technical challenges following the four-year shutdown, Platts reported previously.

Production has ranged from below 200,000 b/d some months to as high as 270,000 b/d.

Prior to the shutdown, the fields accounted for a combined output of 500,000 b/d in the mid-2010s.