Kuwait and Saudi Arabia near Neutral Zone resolution

Dec 23, 2019
2 min read
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Kuwait and Saudi Arabia are likely to come to an agreement this week to resolve a disagreement over the Neutral Zone that halted oil production for years.

The two countries halted output from the jointly-run oilfields - Khafji and Wafra - in the so-called Neutral Zone for almost four years, cutting some 500,000 barrels per day of heavy crude or 0.5 per cent of global oil supply.

“We hope that by the end of the year things will be cleared out and things will go back to normal,” Kuwait oil minister Khaled al-Fadhel said in Kuwait according to media reports. An agreement is expected to be signed on Tuesday.

“Kuwait and Saudi Arabia have always been in agreement (regarding the neutral zone conflict),” Fadhel added. However, resuming oil production from the zone remains a political issue that needs to be discussed at higher levels, he added.

The disagreement between Saudi Arabia and Kuwait started over the Wafra field, which is operated by Chevron Corp. Saudi Arabia extended the original 60-year concession of the field, giving the U.S. company rights over Wafra until 2039. Kuwait says Riyadh never consulted it about the extension.