DUBAI – Saudi Arabia and Kuwait will resume the oil extraction from two large wells located in the so-called neutral zone on the border after a five-year long suspension, as per an agreement signed on Tuesday.
Kuwaiti Minister of Oil, Khaled al-Fadel congratulated via Twitter the Emir of Kuwait Sabah Al-Ahmad Al-Jaber Al-Sabah for “the signature of the memorandum of understanding with the brothers of the Saudi kingdom and the resumption of the production in the divided zone.”
The Kuwaiti state-run KUNA news agency announced “Kuwait, Saudi Arabia sign agreements on dividing neutral zone, divided zone” without providing more details.
The dispute between both countries over their shares of the oil broke out in 2014 when Saudi Arabia extended the United States Chevron Corp’s license in the Wafra well till 2039.
The move was criticized by Kuwait as the kingdom had not consulted the neighboring country prior to renewing the contract.
Wafra was co-run by Kuwait Gulf Oil Company and Saudi Chevron, while KGOC and Aramco Gulf Operations were in charge of the Khafji field.
In the wake of the dispute, the oil production was halted in both fields, with a capacity of 500,000 per day, which represented 0.5 percent of the international oil production back then.
The oil production in the neutral zone, established after a deal to separate the border, is equally shared by both countries.
The Wafra field is mainly in the Kuwaiti half, while Khafji is on the high seas and its fields are located in Saudi territory.
The deal came amid pressure by the Organization of the Petroleum Exporting Countries and its allies for more production cuts to maintain the price in the international market.