Page 4 - MEOG Week 08 2023

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

Iraq

Kuwait

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