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Mon 23 Dec 2019 07:51 PM

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Saudi Arabia, Kuwait to sign deal to restart production at oilfields

Kuwait Gulf Oil Company says signing ceremony will take place Tuesday for the offshore Khafji field and onshore Wafra field

Saudi Arabia, Kuwait to sign deal to restart production at oilfields

The oil produced in the neutral zone in the border area is shared equally between the two nations.

Saudi Arabia and Kuwait will sign a deal on Tuesday to resume production at two major oilfields in a shared neutral zone after five years of stoppage.

The Kuwait Gulf Oil Company (KGOC) said on Monday the signing ceremony will take place in the neutral zone where the offshore Khafji field and onshore Wafra field are located.

The two fields were pumping some 500,000 barrels per day before production was halted first at Khafji in October 2014 and then at Wafra months later over a dispute between the two Arab Gulf neighbours.

Riyadh said at the time the decision was due to environmental issues.

The oil produced in the neutral zone in the border area is shared equally between the two nations.

Khafji was jointly operated by KGOC and Saudi Aramco Gulf Operations, while Wafra was operated by KGOC and Saudi Arabian Chevron.

It was not immediately specified when the two fields will start pumping again, but the agreement comes as oil prices are under pressure due to abundant reserves and weak global economic growth.

The slump has prompted OPEC and its allies to make deeper production cuts starting next month.

OPEC kingping Saudi Arabia pumps just under 10 million bpd, while Kuwait produces around 2.7 million bpd.

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