Saudi should bear Kuwait’s losses on Khafji disruption, says Kuwaiti oil min

Saudi Arabia should bear Kuwait’s losses from Khafji’s oilfield disruptions, as the decision to halt production was taken solely by the Saudi government, Alrai newspaper reported, citing a letter sent from Kuwait's oil minister Ali Al-Omair to Ali Al-Naimi, his Saudi counterpart.

The kingdom “violated” the joint area’s operation agreements; and Kuwait will suffer on the loss of Khafji's 280,000 barrels per day (bpd) of Arabian heavy crude, he added.

In March 2014, the Saudi Arabian meteorology and environment authority decided to shut down operations in the field as it failed to comply with environmental regulations. The remaining facilities were granted five years to cut harmful emissions.

Kuwait offered to resume crude production at 100,000 barrels per day in compliance with environmental standards; however, the proposal was turned down by the Saudi side with no reasons given, Al-Omair added.

Khafji oilfield has launched several initiatives to cut emissions since early 2011 and is expected to complete them by 2017— two years before the grace period’s end.  Al-Omair said that oil production should be resumed in the disputed region, as a result.

Argaam earlier reported that production was halted at the jointly-run oilfield in October due to environmental concerns. Al-Khafji Joint Operations Co. (KJO) is a joint venture between AGOC, a subsidiary of state oil firm Saudi Aramco and Kuwait Gulf Oil Co. (KGOC). Khafji production ranged between 280,000 bpd to 300,000 bpd.