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Chevron readies to resume pumping oil from Saudi-Kuwaiti Neutral Zone's Wafra field

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Chevron readies to resume pumping oil from Saudi-Kuwaiti Neutral Zone's Wafra field


Company said it has commenced 'pre-startup activities'

Neutral Zone fields, including Wafra, have 500,000 b/d capacity

IEA estimates Wafra output could reach 80,000 b/d by Q4

London — Chevron is preparing to resume operations at the Wafra field in the Neutral Zone shared by Saudi Arabia and Kuwait after a near five-year hiatus, the company said Thursday.

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Chevron said its subsidiary Saudi Arabian Chevron, which runs the onshore field with Kuwait Gulf Oil Company, "has now embarked on a series of pre-startup activities, which includes efforts to ensure its workforce is ready to safely restart operations and then production."

Kuwaiti media reported Thursday that the two countries had authorized the resumption of joint operations at the field starting Sunday, citing an internal memo. The field has been shut since 2015.

Wafra and the offshore Khafji field -- which is jointly run by Aramco Gulf Operations Co. and KGOC, but has been shuttered since October 2014 -- were at the center of a political dispute between the two countries that was resolved in December after months of talks.

The fields, which have a combined capacity of 500,000 b/d, are located in the Neutral Zone, an area straddling the border between Saudi Arabia and Kuwait. The countries agreed in 1970 to co-manage and share crude production from the zone equally.

Kuwait divided zone oil and gas fields

Chevron did not provide a timeline for when crude oil would begin flowing from Wafra but said in December that full production at pre-shutdown capacity is expected within 12 months. In its statement Thursday, the company said that while the field has been shut down "a robust maintenance and preservation program to maintain operational readiness" had been carried out.

Earlier Thursday, the International Energy Agency said output at Wafra could reach 80,000 b/d by the fourth quarter and then 145,000 b/d in a year, while Khafji production could hit 60,000 b/d by August and 175,000 b/d in a year.

Kuwaiti oil minister Khaled al-Faleh said last month that Kuwait would be able to produce 250,000 b/d of crude and 500 Mcf/d of natural gas by the end of the year from its portion of the Neutral Zone. Development of the zone will also enable Kuwait to add to its oil and gas reserves and provide a new marine route to export its share of Neutral Zone crude, the minister told the country's National Assembly, according to state-run news agency Kuna.

The Saudi and Kuwaiti energy ministries could not be reached for comment.

Both Kuwait and Saudi Arabia have said the resumption of oil production from the fields would not clash with their output quotas, under the supply cut accord agreed by OPEC, Russia and nine other allies.

Saudi Arabia pumped 9.74 million b/d, according to the latest S&P Global Platts survey of OPEC production, well below its quota of 10.14 million b/d. Kuwait, meanwhile, produced 2.66 million b/d in January, in line with its cap, according to the survey.

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