Page 5 - MEOG Week 50 2022

MEOG COMMENTARY MEOG

Source: Wood
Mackenzie

operations began in August last year on the first quotas while maintaining spare capacity.
pipeline from the PNZ’s al-Khafji field, with 24 The Permanent Joint Committee for the PNZ,
mmcf (680,000 cubic metres) of gas piped to also known as the divided zone, is comprised of
the company’s networks in Kuwait. The com- officials from the Kuwaiti Ministry of Oil (MoO)
pany reported that operating the conduit would and the Saudi Ministry of Energy. The meeting
“boost optimum use of the petroleum resources” was held at the head office of the Wafra Joint
in the PNZ while meeting “local needs for gas, Operations (WJO) company.
particularly at peak consumption times”. KGOC represents the country’s interests in
The deal is sure to elicit a response from WJO area, while Saudi Arabian Chevron (SAC)
Iran, whose foreign ministry claimed the March carries out work on behalf of Saudi Arabia and its
agreement was illegal given that part of the NOC Saudi Aramco.
Dorra deposit is the Arash field which lies within MoO undersecretary Dr. Nimir Al-Sabah
Iran’s borders. was quoted by KUNA as saying that the meet-
“The oil ministry has seen necessary prepara- ing comes at a ‘crucial time’ in the development
tions and carried out studies to develop and use of the onshore Wafra and offshore Al-Khafji
the shared field of Arash,” said Ahmad Asadza- oilfields, output from which has been ramping
deh, Deputy Oil Minister for International and up since a December 2019 agreement that broke
Commercial Affairs. years of deadlock.
“The reason to have delayed using this shared At capacity, the fields can produce around
field was pending decision in demarcation dis- 550,000 bpd – Al-Khafji 300,000 bpd and Wafra
putes with Kuwait. But given that the other side, 250,000 bpd. Production is shared 50:50 by the
regardless of the previous talks and unilaterally, two countries.
moves to develop the field, there is no reason for The fields were shut in because of disagree-
delay,” Asadzadeh said. ments between the two governments in 2014
Even without a demarcation of the field’s bor- and then in 2015. Following the 2019 agreement,
ders, it would be feasible for all three countries to output increased to around 270,000 bpd by the
work together on development, he was also cited end of 2021 and the partners are working to
as saying, adding: “The oil ministry expresses its expand, with Kuwaiti officials last year announc-
readiness for talks in this regard.” ing ambitious though loose plans to reach a com-
Iran started talks with Kuwait in 2000 to bined output of 700,000 bpd.
develop the field but no agreements were Al-Sabah highlighted efforts to streamline
reached. Arash was discovered in 1962. It is esti- administrative, operating and safety procedures
mated to hold around 13 trillion cubic feet (368 and the importance of regular meetings in facil-
bcm) of natural gas. itating collaboration on the projects. The Saudi
delegation was led by Saudi Assistant Energy
Fast-track Minister Mohammad Al-Brahim.
In June, Kuwait-Saudi working group focused on Kuwait has a target of increasing oil produc-
the development of joint oil and gas projects met tion capacity from around 2.8mn bpd to 3.5mn
this week to discuss the acceleration of efforts in bpd by 2025 and to 4mn bpd a decade later. Saudi
the PNZ. Arabia is working to expand its maximum sus-
The expansion of production from the shared tainable capacity (MSC) from 12.2mn bpd to
on- and offshore assets comes as both countries 13mn bpd by 2027.
work to raise total domestic oil capacity and This figure is seen reaching 13.4mn bpd
come under pressure to meet higher OPEC+ including output from the PNZ.™

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