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A delegate at the OPEC meeting in Vienna this week tells MEES that the 300,000 b/d Khafji field in the offshore Neutral Zone, shared 50:50 by Saudi Arabia and Kuwait, remains offline following a unilateral Saudi decision to take Khafji out of production last month.
A meeting is supposedly scheduled for 30 November, though it remains unclear if a resolution is in sight.
Khafji is believed to have been producing about 200,000 b/d when it was shut down. Saudi officials cited environmental concerns as the reason for shutting in production at Khafji, but it appears that the problem runs far deeper. Kuwait stopped issuing new work visas to Chevron’s employees operating in the onshore Neutral Zone and refuses to renew expiring work permits. Part of the problem in the shared production zone is that, while decisions are meant to be taken jointly, each side often operates independently of the other – leading to confusion and some degree of mistrust. While both sides continue to downplay disputes in the Neutral Zone, the loss of Khafji has far reaching consequences, particularly for the Kuwaiti side – which has high hopes of boosting oil output. The loss of Khafji barrels means that Kuwait produces 2.8mn b/d, and MEES understands that it is currently unable to push beyond this level while Khafji is offline.
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