Page 9 - MEOG Week 14 2021

MEOG PROJECTS & COMPANIES MEOG

OPEC+ move brings focus back to PNZ

SAUDI ARABIA SAUDI Arabia and Kuwait are reported to be PNZ output is currently 135,000 bpd, suggesting
moving towards ramping up efforts in their that total production is 270,000 bpd.
shared Partitioned Neutral Zone (PNZ) follow- During a press briefing following last week’s
ing the OPEC+ agreement to gradually ease out- OPEC+ summit, he said: “Everything is going
put restrictions over the next few months. smoothly there with our friends in Kuwait.”
Speaking to S&P Global Platts this week, This is significantly more than the 50,000-
sources said that the cuts had given the neigh- 60,000 bpd quoted by Aramco president and
bours an opportunity to carry out rehabilitation CEO Amin Nasser in the company’s March 22
work to address subsurface, seismic and geolog- earnings call, when he said output was “ramping
ical issues and prepare the Al-Khafji and Wafra up over time”.
fields to reach their former heights. The prince met with Kuwaiti Oil Minister
At capacity, Khafji and the onshore Wafra oil- Mohammed al-Fares last month to review “the
field can produce around 550,000 barrels per day signed agreements between both countries and
(bpd); however, the fields were shut in because of a memo of understanding [MoU] of resuming
disagreements between the two governments in joint oil production along the border”, according
2014 and then in 2015. to Kuwait’s Ministry of Oil.
Operations at Wafra are managed by Wafra Meanwhile, Platts quoted independent
Joint Operations (WJO), which is jointly run by Kuwait-based oil analyst Kamal al-Harami as
KGOC and Saudi Arabian Chevron (SAC), with saying that the suppressed rate of production
the latter representing the Kingdom. “is due to the OPEC quotas”. He added: “If the
While environmental and contractual con- OPEC agreement wasn’t in place, it could pro-
cerns were cited as the reasons for the lengthy duce in the region of 500,000 bpd.”
shut-in, Middle East Oil & Gas (MEOG) under- However, in January last year, then-Kuwaiti
stands that divisions within the Kuwaiti govern- oil minister Khaled al-Fadhel said that output
ment and continuing discomfort regarding the from the PNZ would not have an impact on
key role played by Chevron in operations were Kuwait’s compliance with the ongoing OPEC+
the key factors preventing a restart. production cuts and PNZ output is not included
The US company’s concession for Wafra was in Saudi Arabia’s maximum sustainable capacity
renewed by Saudi Arabia without first consulting (MSC).
Kuwait. It is worth noting though, that the Kingdom
The operation of Khafji is less contentious, does include in MSC 100% of output from the
with KGOC partnered by Saudi Aramco subsid- 150,000 bpd Abu Sa’fah field which it shares with
iary Aramco Gulf Oil Co. (AGOC) in the Khafji Bahrain.
Joint Operations (KJO) entity. This differentiation pertains to the apportion-
One source told Platts: “They are doing a lot ing of rights to the PNZ to AGOC, while Abu
of work on those to make sure the production Sa’fah is operated by the parent or “company
is sustainable from Wafra and Khafji. They are 1,000” as it is referred to internally.
doing the right foundations and bases for pro- Meanwhile, Harami said that work has been
duction, as well as infrastructure tie-ins, and ongoing to prepare for the development of the
investment plans being thrown around between Dorra gas field in the offshore PNZ. Preparatory
Aramco and KGOC and Chevron. There is a work on the field, which holds 280-310bn cubic
three-way dance on paper that is very good.” metres of gas and roughly 300mn barrels of oil, is
According to Saudi Energy Minister Prince nearly complete, he said. Development of Dorra
Abdulaziz bin Salman, the Kingdom’s share of has been stalled since 2013.™

Week 14 07•April•2021 www. NEWSBASE .com P9