Kuwait's long-term aim to expand its upstream activities can be aided through resuming production from the disputed Partitioned Neutral Zone (PNZ) located between the borders of Saudi Arabia and Kuwait, Oxford Business Group reported on Friday.
The resumption of activity in the PNZ, an area of 5,770 square kilometers between the borders of Saudi Arabia and Kuwait, will help to achieve Kuwait's long-term upstream expansion aim, the Oxford Business Group reported.
The joint area covering 5,770 square kilometers is capable of producing 500,000 barrels of oil per day, which is equivalent to about 4% of Saudi Arabia and Kuwait's total production last June, the report said.
According to the report, Kuwait remains below its target of the Organization of Petroleum Exporting Countries (OPEC), despite a rise in production to around 2.7 million barrels per day of crude since the imposition of OPEC quotas in 2017. Nevertheless, the country aims to raise its production capacity to 4 million barrels per day by 2020, of which it is hoped 350,000 barrels per day will come from the PNZ.
The two countries jointly operated Khafji and Wafra oilfields in the zone; however, operations were halted in October 2014 and May 2015 following environmental concerns and disputes over the use of the land.
While the parties have not reached an agreement, officials are hopeful that recent bilateral talks will lead to resumption in production. Khalid Al Falih, Saudi Arabia’s minister for energy, industry and mineral resources, stated in February that he expected to reach an agreement before the end of this year.
In line with this, Saudi King Salman bin Abdulaziz al Saud, Saudi Arabia’s minister of state for energy affairs, arrived in Kuwait on July 24 to discuss technical points related to reopening upstream activity in the zone, and said major issues had been resolved.
The report also said Kuwait’s plans, which include large-scale projects such as the formation of an integrated energy industry, include the production of large volumes of natural gas.
Kuwait aims to significantly increase non-associated natural gas production to 2 billion cubic feet by 2040. Recent projects in this sector also include drilling 15 deep wells in the Jurassic formations in the north of the country.
In addition, the report noted that Kuwait Petroleum Corporation (KPC) plans to triple domestic refining capacity, from 701 thousand barrels per day in 2017 to 2 billion barrels by 2035 by upgrading its existing refineries and building new facilities.
By Busranur Begcecanli