Page 4 - MEOG Week 08 2023
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MEOG                                          COMMENTARY                                               MEOG

       Iraq and Kuwait hold talks to

       reach maritime agreement

       The Gulf neighbours are looking to reach an agreement that could
       open up opportunities for collaborative efforts on offshore E&P

        IRAQ / KUWAIT    THE governments of Iraq and Kuwait held a  upstream operating arm of KPC, has been prom-
                         round of legal and technical talks over the week-  ising to start drilling offshore for many years,
                         end as they try to resolve a long-running dispute  with separate surveys completed by Canada’s
       WHAT:             over their shared maritime border.   Sander Geophysics and China’s BGP during the
       No agreement has ever   Speaking during the Munich Security Con-  first half of the decade.
       been reached on the   ference, Kuwaiti foreign minister Sheikh Salem   The announcement came 18 months after
       demarcation of Iraq and   Abdullah Al-Jaber Al-Sabah said he was hopeful  KOC was first reported to have invited Hallibur-
       Kuwait’s offshore border.  progress would be made. “It’s very high priority  ton and fellow US oilfield services firms Baker-
                         for my government and we are working with Iraq  Hughes and Schlumberger had been invited to
       WHY:              to finalise the demarcation of that maritime bor-  submit bids for the drilling campaign.
       Both countries have   der […] We are moving ahead,” he said.  Following the award to Halliburton, the
       been planning to explore   The shared land border was demarcated by  American company agreed to charter two
       their respective offshore   the United Nations in 1993, but this legislation  jack-up drilling rigs from Chinese drilling con-
       areas for years, signing   does not cover the offshore area.  tractor China Oilfield Service Ltd (COSL).
       agreements for seismic   To the south, Kuwait and Saudi Arabia share   As a sub-contractor, COSL will deploy two
       and drilling work.  the Partitioned Neutral Zone (PNZ) which has  jack-up rigs – Oriental Dragon and Oriental
                         allowed – with politically-motivated interrup-  Phoenix – to drill six high-pressure, high-tem-
       WHAT NEXT:        tion – the development of oil and gas reserves  perature wildcats off Kuwait over a three and a
       Neither country is short   both on- and offshore. A similar arrangement  half-year period.
       of oil and gas reserves,   could work in the Iraqi/Kuwaiti offshore  Drilling was scheduled to start in mid-2020,
       but offshore collaboration   Neither the Kuwaiti mainland nor Iraq have  with the first rig due to arrive in July 2020 and
       may offer significant   yet carried out offshore exploration, though  the second in January 2021. Reports in local
       upside.           efforts in that regard have been in planning for  Kuwaiti media noted that Halliburton had
                         years.                               informed KOC of challenges in terms of import-
                                                              ing offshore drilling rigs from China owing to
                         Exploration efforts                  the COVID-19 pandemic, with the project’s
                         Last year, the Kuwait Petroleum Corp. (KPC)  start date having been pushed back until Octo-
                         said it was nearing the launch of exploration  ber 2021, but no progress has been reported after
                         work in its offshore after signing a deal in mid-  that date.
                         2019 with US firm Halliburton to drill six explor-  Kuwait has been struggling to raise its domes-
                         atory wells offshore, seen adding add 100,000  tic oil production, and while new offshore
                         barrels per day (bpd) to Kuwaiti production.  resources provide an important new opportu-
                           Kuwait Oil Co. (KOC), the domestic  nity, the budgetary and contracting issues that



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