Saudi Arabia in new move to cut Kuwait neutral zone oil output
Chevron blames problems in securing residence permits from Kuwaiti authorities for its expatriate staff.
Al-Arab Online  [Published On: 16/04/2015]
Wafra currently produces around 200,000 barrels per day
KUWAIT CITY - Saudi Arabia has told Kuwait it wants to halt production from a jointly operated oilfield in the neutral zone between the two countries, a Kuwaiti newspaper reported on Thursday.

The Wafra field, which currently produces around 200,000 barrels per day, is the largest onshore field in the 5,000-square-kilometre neutral zone which the Gulf neighbours exploit jointly under a nearly 50-year-old treaty.

Saudi Arabian Chevron told Kuwait Gulf Oil Company that it wanted to halt output from May 13, and blamed problems in securing residence permits from the Kuwaiti authorities for its expatriate staff, Al-Qabas newspaper reported.

The crude is exported through Al-Zour port, just inside Kuwait, meaning that both companies' staff need papers from the emirate.

There was no immediate word from the Kuwait authorities on the company's complaint.

Saudi Arabia already halted joint production at one neutral zone field in October, the offshore Khafji field which had been pumping more than 300,000 bpd.

It cited environmental concerns for that decision.

The production cuts come amid a worldwide supply gut that has driven down crude prices.

OPEC kingpin Saudi Arabia has spare production capacity of more than 2.0 million bpd but Kuwait has little spare capacity to make up for lost neutral zone output.

The 500,000 bpd production from Wafra and Khafji was shared equally between the two sides.

Smaller jointly operated fields still pumping in the neutral zone produce another 200,000 bpd.

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