Kuwait and Saudi Arabia to speed up oil projects in Gulf neutral zone

Iran has said preparations in place to drill in Arash oil field

Kuwait and Saudi Arabia signed an agreement in 2019 dividing up oil production in the neutral zone. Reuters

Kuwait and Saudi Arabia have agreed to speed up efforts on projects in the neutral zone linking the two Gulf neighbours as the countries reiterated joint exclusive rights to the Durra gasfield, to which Iran also claims rights.

The Kuwaiti-Saudi joint permanent committee is monitoring progress on oil projects in the zone, and intends to eliminate any “impediments” that could hinder their completion, Kuwaiti Oil Ministry Undersecretary Sheikh Nimr Al Sabah said.

The committee was “working to develop and exploit the natural resources in the divided region, to meet the growth of domestic demand”, he said.

Kuwait Oil Minister Saad Al Barrak called on Iran to validate its own claim to the Al Durra gasfield, which is known as Arash in Iran, by demarcating its own maritime borders first.

Iran has previously said it has a stake in the field and called a Saudi-Kuwaiti agreement signed last year to develop it “illegal”.

“Until this moment, this is an exclusive right of Kuwait and Saudi Arabia in the Durra field, and whoever has a claim must start demarcating the borders. And if it has a right, it will take it according to the rules of international law,” Mr Al Barrak told Saudi state-run Al Ekhbariya television.

“The other side has claims that are not based on a clear demarcation of the maritime borders,” he added, referring to Iran.

Saudi Arabia said last week that the kingdom and Kuwait exclusively own natural wealth in the Arabian Gulf's maritime neutral zone.

The kingdom also urged Iran to start negotiations with Riyadh and Kuwait on the demarcation of the eastern border of the area.

Analysts have said Kuwait's comments on the field are because of its urgent need for domestic gas resources.

“This makes the Al Durra development a higher priority for them compared to Iran or Saudi Arabia. However, Saudi Arabia and Iran consider Al Dorra as a territorial concern because they aim to safeguard what they perceive as their rightful resources,” Naser Al Tamimi, political analyst and commentator with interests in energy politics, told The National.

“Looking forward, with the demarcation of the maritime borders still unresolved, this problem could raise tensions occasionally.

“There are fears from Gulf countries that Iran will try to exploit the issue to extract territorial, negotiating, or even economic gains.”

Kuwait and Saudi Arabia signed an agreement in 2019 dividing up oil production in the neutral zone that sits between the two countries, a move that analysts say could bring an additional 500,000 barrels of oil per day into the market.

Two major oilfields in the neutral zone between Saudi Arabia and Kuwait, the onshore Wafra field and the offshore Khafji ceased production in 2014 and 2015 respectively, but were restarted on July 1, 2020.

The meetings between Kuwaiti and Saudi Arabia come after Mohsen Khojsteh Mehr, managing director of the National Iranian Oil Company, said “preparations are fully in place to start drilling in the joint Arash oilfield”.

“Considerable resources have been allocated to the board of directors of the National Iranian Oil Company to implement the development plan for this field,” he said, Iranian state media reported.