Dubai — Saudi Arabia and Kuwait could pump 320,000 b/d from the neutral zone a year after resumption of production that's shared equally by the two OPEC members, the International Energy Agency said Thursday.
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The offshore al-Khafji field, owned by Saudi Arabia's Aramco Gulf Operations Co. and Kuwait Gulf Oil Co., could produce about 60,000 b/d by August and after one year 175,000 b/d, the Paris-based agency said in its monthly oil report. The onshore Wafra field, which is operated by KGOC and Saudi Arabian Chevron, may produce 80,000 b/d in Q4 2020 and later 145,000 b/d, it said.
Production from the zone has been halted for more than four years. Saudi Arabia and Kuwait signed agreements in December to resume output but didn't specify a timeline. Chevron has said it will restart "at the appropriate time."
Saudi energy minister Prince Abdulaziz bin Salman said in December production from Khafji could reach 325,000 b/d by the end of 2020. Both Kuwait and Saudi Arabia have said the resumption of oil production from the divided zone would not clash with their OPEC+ commitments.
Saudi Arabia produced 9.72 million b/d in January, slightly lower than its 9.744 million b/d self-imposed ceiling that is 400,000 b/d below its OPEC+ quota, the IEA said. Meanwhile Kuwait pumped 2.67 million b/d in January, nearly in line with its 2.657 million b/d quota.
OPEC + is in the midst of a trimming 1.7 million b/d from global oil markets through the end of March to soak up an expected surplus in Q1 2020. The coalition, which deepened cuts from 1.2 million b/d implemented in 2019, is mulling shaving another 600,000 b/d of output to deal with the impact on global oil demand from the deadly coronavirus. Russia is still studying that proposal.
OPEC on Wednesday shaved 230,000 b/d from its 2020 world oil demand forecast due to the virus outbreak, which has caused a slowdown in Chinese economic activity and suspensions of hundreds of flights, as the death toll continues to rise.