Saudi-Kuwait Neutral Zone: Supply Concerns Spur Restart Rumors

Restart would alleviate fears of global supply crunch. But is it really likely?

More than three years since production from the joint Saudi-Kuwaiti Partitioned Neutral Zone (PNZ) was halted completely, rumors are again swirling that a restart is looming. Kuwaiti officials have always claimed a resumption was imminent, but a new voice was this week added to the chorus, raising expectations that this time it could be different.

Japan’s Toyo Engineering announced on 2 July that its services contract with Khafji Joint Operations (KJO) – the JV responsible for operating the PNZ’s offshore fields – had been extended to 2023. It slipped in the nugget that KJO now “starts the preparation work to reproduce the oil from the fields from 2019.” (CONTINUED - 819 WORDS)


chart Neutral Zone Crude Oil Exports (‘000 B/D): Offshore Vols Accounted For More Than 50% Pre-2014 Shut In But Were Already In Decline