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Kuwait’s Emir Shaikh Sabah al-Ahmad Al Sabah has said that relations with neighboring Saudi Arabia are strong and that production at the shared Partitioned Neutral Zone (PNZ) will resume soon.
Production at the PNZ has been halted since May 2015, when the 200,000 b/d Wafra field was shut in. The 300,000 b/d offshore Khafji field has been closed since October 2014. Kuwait has lost around 250,000 b/d of output from the PNZ and has been unable to compensate for reduced output. It produced 2.88mn b/d in September 2014, but just 2.75mn b/d in December.
While renewed PNZ production would be a boon for Kuwait, the Emir’s optimism appears misplaced. Even Chevron, which operates Saudi Arabia’s PNZ interests on behalf of Aramco, doesn’t expect production to resume until 2017 (MEES, 6 November 2015). While Saudi Arabia is prioritizing market share over revenue, it would only profit from half of the additional PNZ volumes.
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