Exports from Kuwait-Saudi oil field ‘to resume’

Kuwait: Kuwait’s emir has said operations and exports from oil fields jointly operated with Saudi Arabia will resume soon, local media reported on Thursday.

“The will soon be a resumption of operations and exports in joint oil fields. No matter what happens, we don’t have a disagreement with Saudi Arabia and even if there is one, it will be resolved,” Shaikh Sabah Al Ahmad Al Sabah was quoted as saying by Al Rai newspaper.

He did not elaborate on how obstacles to reopening the fields would be removed.

The Al Khafji oilfield has been shut since October 2014 for non-compliance with new Saudi environmental standards. It is operated by Al Khafji Joint Operations Co, a joint venture between AGOC, a subsidiary of state oil firm Saudi Aramco, and Kuwait Gulf Oil Co.

Saudi Arabia and Kuwait also share the Wafra oilfield, which has been shut since May 2015 due to operating difficulties, according to officials. US oil major Chevron operates the field on behalf of the Saudi government.

Before the closure, Al Khafji field produced around 280,000 to 300,000 barrels per day, while Wafra has an output capacity of about 220,000 bpd.

The remarks by the emir were made at a meeting with newspaper editors, Al Rai reported.

The emir also said the government had to raise ultra-low domestic prices of fuels and utilities.

“The government has to stop subsidies and raise the prices of fuel, electricity and water,” he was quoted as saying, without giving details of when the changes might happen or how big they would be.

Kuwait has been looking at a range of ways to cut state spending and increase revenues to cope with declining oil revenues due to lower crude prices. The issue of the Kuwait-Saudi differences over the closure of the Khafji oilfield came to light when an alleged secret correspondence between the oil ministers of both countries was leaked to the Kuwaiti press in July, 2015.

In the letter, excerpts from which were published by Kuwaiti daily Al Rai, Kuwait warned the continued closure of the Khafji oilfield will result in huge losses that Riyadh must compensate for in future.

Kuwait rushed to assert that relations with Saudi Arabia were robust as it launched a probe to determine how the secret correspondence had been leaked.

Saudi-owned newspaper Al Hayat stated then that the letter revealed a contradiction between Kuwait’s public and private positions on the dispute, noting that Kuwait’s oil minister Ali Al Omair had publicly stated in July that the dispute with Saudi Arabia on the Khafji and Wafra fields was close to ending.