Page 9 - MEOG Week 50 2021

MEOG PROJECTS & COMPANIES MEOG

Kuwait and Saudi working

to increase output from PNZ

KUWAIT/SAUDI KUWAIT and Saudi Arabia are working to by Saudi Arabia without first consulting Kuwait.
increase oil production from their shared Par- In April, sources from both Kuwait and Saudi
titioned Neutral Zone (PNZ). The announce- said that they were moving towards ramping up
ment was made by state media in both countries efforts in PNZ following OPEC+ agreement to
following a visit to Kuwait by Crown Prince gradually ease output restrictions.
Mohammed bin Salman (MbS) last week. The sources said that the cuts have given the
A statement run by the Saudi Press Agency neighbours an opportunity to carry out rehabil-
said that the parties are working to implement itation work to address subsurface, seismic and
the terms of a memorandum of understanding geological issues and prepare Khafji and Wafra
(MoU) on the development of the PNZ and that to reach their former heights.
work is ongoing to ramp up output from the off- One source told Platts: “They are doing a lot
shore al-Khafji and the onshore Wafra oilfields. of work on those to make sure the production
At capacity, Khafji and Wafra can produce is sustainable from Wafra and Khafji. They are
around 550,000 barrels per day (bpd); however, doing the right foundations and bases for pro-
the fields were shut in because of disagreements duction, as well as infrastructure tie-ins, and
between the two governments in 2014 and then investment plans being thrown around between
in 2015. Aramco and KGOC and Chevron. There is a
Operations at Khafji are managed by Khafji three-way dance on paper that is very good.”
Joint Operations (KJO), which is jointly run by In August, Saudi Energy Minister Prince
Kuwait Gulf Oil Co. (KGOC) and Saudi Ara- Abdulaziz bin Salman said the Kingdom’s share
mco subsidiary Aramco Gulf Co-operation Co. of PNZ output is currently 135,000 bpd, suggest-
(AGOC). ing that total production is 270,000 bpd.
Saudi Arabia is represented by Saudi Ara- Meanwhile, in October, Kuwait Petroleum
bian Chevron (SAC) in Wafra Joint Operations Corp. (KPC) CEO Hashem Hashem said he
(WJO), with KGOC again representing Kuwait. anticipated that the company’s upstream sub-
While environmental and contractual con- sidiary Kuwait Oil Co. (KOC) would have its
cerns were cited as the reasons for the lengthy production capacity from the PNZ boosted to
shut-in, Middle East Oil & Gas (MEOG) under- around 350,000 bpd by 2025, implying a total
stands that divisions within the Kuwaiti gov- production of 700,000 bpd. Sources working in
ernment and continuing discomfort regarding the zone have said, though, that production has
the key role played by Chevron in operations been on the low side of 200,000 bpd, with output
were the key factors preventing a restart. The US likely to be capped at around 400,000-450,000
company’s concession for Wafra was renewed bpd owing to technical challenges.™

Week 50 15•December•2021 www. NEWSBASE .com P9