Kuwait Says It Agrees With Saudis to Restart Joint Oil Field

  • Plans gradual start at 300,000 barrel shared Khafji field
  • Field being prepared for maintenance before output resumes

Kuwait agreed with Saudi Arabia to resume production at an offshore oil field shared by the two OPEC members, the official Kuwaiti news agency reported, without giving a specific time for the restart.

The two countries are preparing to start maintenance at Khafji, Kuwait News Agency reported, citing the nation’s acting oil minister, Anas al-Saleh, speaking in parliament. Production will start initially in “small quantities, which would be increased taking into consideration environmental concerns” before returning to normal levels, according to KUNA. Production at Khafji halted in October 2014 because of environmental concerns.

Saudi Arabia’s Ministry of Petroleum and Mineral Resources didn’t immediately reply to a request for comment.

The plan to restart Khafji comes as Saudi Arabia and Kuwait are set to attend a meeting of OPEC members and other producers in Doha, Qatar, next month to discuss a proposed freeze in output. The participants including Russia are seeking to prop up prices that have slumped since mid-2014.

“I’m skeptical until I see some confirmation from the Saudi side or some signs that work is being done at the field,” said Robin Mills, chief executive officer at Qamar Energy in Dubai. The plan to restart Khafji won’t affect the Doha meeting because production probably won’t have started in major quantities by then, Mills said.

Production in the shared area between Kuwait and Saudi Arabia reached 600,000 barrels a day in 2011, including output from Khafji and the onshore Wafra field, according to data compiled by Bloomberg Intelligence. The Khafji shutdown led to a loss of 300,000 barrels of daily output, Prince Abdulaziz bin Salman, Saudi Arabia deputy oil minister, said last year.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE