Saudi Arabia and Kuwait have resumed oil production from shared oil fields located along their Neutral Zone after operations in the territory were halted five years ago.
Kuwait , Kuwait
10 July 2020, 12:00 AM
31 July 2020, 12:00 AM
Oil production from the Wafra and Khafji fields began on July 1, the Kuwaiti oil ministry said in a tweet on Monday.
Earlier this year the ministry announced it was re-starting production from the fields after reaching a deal with Saudi Arabia.
According to earlier comments made by a senior management official at Kuwait Gulf Oil Company, production from the offshore Khafji oil field, which was halted for a month, is expected to be producing at the rate of 80,000 bpd from July 1, before reaching 100,000 bpd after two months. The field is expected to maintain production of 175,000 bpd by year-end.
The onshore Wafra field will initially produce 10,000 barrels per day before reaching 70,000 bpd by the end of August. The field is expected to reach 145,000 bpd output by year-end, according to Reuters reports.
Both Kuwait and Saudi Arabia are currently cutting back output as part of the Opec+ agreement, which looks to restrict around 9.7 million bpd of production from the markets until July. The start-up of production from the shared oil fields provides additional spare capacity to the producers, in the event of a shortage.
According to the US Energy Information Administration, spare capacity refers to the volume of output that can be brought online within 30 days and sustained for a minimum of 90 days.