Page 4 - MEOG Week 31

MEOG Commentary MEOG
Kuwait and Saudi
look to solve PNZ
problem
The neighbours are looking to resume production in order to increase capacity and to make up for a shortfall from elsewhere in OPEC.
KuWait/sauDi
What:
Fields in the PNZ have a combined total capacity of around 500,000 bpd, but have been shut in for more than ve years.
Why:
The disagreement came about in part because
of the extensions of Chevron’s operatorship of the Wafra eld.
SAuDI Deputy Oil Minister Prince Abdulaziz Bin Salman visited o cials in Kuwait last week as the neighbours resume e orts to nd a solution to their quarrel about the Partitioned Neutral Zone (PNZ).
No oil has been produced from the 5,700-square km border area since the fields were shut in because of disagreements between the two governments in 2014 and then in 2015.
e Kuwait News Agency (KuNA) quoted a government spokesman as saying that the sides were working to complete “all technical issues required” before beginning discussions about resuming oil production.
Output of a combined total of around 500,000 barrels per day from the o shore Al-Kha i and onshore Wafra elds remains shut-in, with divi- sions within the Kuwaiti government said to be
among the main factors preventing a restart.
Khafji
Al-Kha i was shut down on Riyadh’s orders in 2014, purportedly over environmental viola- tions, depriving the equal partners of combined output of around 250,000 bpd.
A series of contracts placed in 2018 by the o shore area’s operating company, Kha i Joint Operations (KJO), sent signals of work intensi- fying on the ground, in presumed anticipation of an imminent restart. KJO is a joint venture of units of government-owned Kuwait Petroleum Corp. (KPC) and Saudi Aramco.
Five-year engineering services contracts were let to Canada’s SNC Lavalin in February and to Japan’s Toyo Engineering in July, the latter explic- itly linked by the contractor to a planned return
What next:
while most of the positive noises have thus far come from the Kuwaiti camp, Saudi now appears more engaged with
the efforts to resume production.
P4
w w w . N E W S B A S E . c o m Week 31
06•August•2019