Page 5 - MEOG Week 04 2023

MEOG COMMENTARY MEOG

Source: Wood
Mackenzie

1bn cubic feet (28mcm) per day alongside 84,000 assistant Minister of Energy Muhammad bin
bpd of condensate. Abdul Rahman Al-Ibrahim, and focused on
Work on the field, which holds 280-310bn “joint action[s] to serve the strategic interests of
cubic metres of gas and around 300mn barrels both countries”.
of oil, has been stalled since 2013. As with the The statement added that the parties had
development of the PNZ’s oil assets – Al-Khafji discussed “the possibility of maximising benefit
(offshore) and Wafra (onshore) – gas output will from the oil projects”, presumably in reference to
be divided evenly between KGOC and AGOC. expanding production.
The offshore portion of the zone also includes The expansion of production from the shared
the minor Hout oilfield where US services firm on- and offshore assets comes as both countries
McDermott previously carried out pipeline and work to raise total domestic oil capacity and
commissioning work for the partners’ Khafji come under pressure to meet higher OPEC+
Joint Operations (KJO) entity. Previous efforts quotas while maintaining spare capacity.
to develop Dorra had been designed to yield The working group held a meeting in June
600mmcf (17 mcm) per day of gas. at the head office of the WJO with a view to
Announcement of plans by Kuwait and Saudi raising output. At that point, Dr. Al-Sabah said
to move forward with development elicited that the meeting was at a ‘crucial time’ in the
response from Iran. development of the onshore Wafra and offshore
Deputy oil minister for international and Al-Khafji oilfields, output from which has been
commercial affairs Ahmad Asadzadeh said: ramping up since a December 2019 agreement
“The oil ministry has seen necessary prepa- that broke years of deadlock.
rations and carried out studies to develop and At capacity, the fields can produce around
use the shared field of Arash […] The reason to 550,000 bpd – Al-Khafji 300,000 bpd and Wafra
have delayed using this shared field was pending 250,000 bpd. Production is shared 50:50 by the
decision in demarcation disputes with Kuwait. two countries.
But given that the other side, regardless of the The fields were shut in because of disagree-
previous talks and unilaterally, moves to develop ments between the two governments in 2014
the field, there is no reason for delay.” and then in 2015. Following the 2019 agreement,
He added that the Iranian “oil ministry output increased to around 270,000 bpd by the
expresses its readiness for talks” with its neigh- end of 2021 and the partners are working to
bours regarding joint development. expand, with Kuwaiti officials last year announc-
Iran started talks with Kuwait in 2000 to ing ambitious though loose plans to reach a com-
develop the field but no agreements were bined output of 700,000 bpd.
reached. Arash was discovered in 1962. It is esti- Al-Sabah highlighted efforts to streamline
mated to hold around 13tcf (368bcm) of natural administrative, operating and safety procedures
gas. and the importance of regular meetings in facil-
itating collaboration on the projects. The Saudi
Oil operations delegation was led by Saudi assistant energy
Also this week, the joint Kuwaiti-Saudi Standing minister Mohammad Al-Brahim.
Committee met at the KJO HQ to review the lat- Kuwait has a target of increasing oil produc-
est progress reports from oil developments in the tion capacity from around 2.8mn bpd to 3.5mn
on- and offshore sections of the PNZ. bpd by 2025 and to 4mn bpd a decade later. Saudi
According to a statement from the Kuwaiti Arabia is working to increase its maximum sus-
Ministry of Oil (MoO), the meeting was tainable capacity (MSC) from 12.2mn bpd to
co-chaired by undersecretary of the MoO Sheikh 13mn bpd by 2027. This figure is seen reaching
Dr. Nimer Fahad Al-Malik Al-Sabah and Saudi 13.4mn bpd including output from the PNZ.™

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