Saudi-Kuwait oilfield halted

Kuwaiti oil trade union condemns closure of Khafji

KHOBAR/KUWAIT CITY, Oct 19, (Agencies): Crude production from the Khafji oilfield, jointly run by Saudi Arabia and Kuwait, has been halted temporarily to comply with environmental rules, according to an industry source familiar with Saudi policy and an internal letter seen by Reuters.

The move is unlikely to affect oil supplies from Saudi Arabia, the world’s top oil exporter, because of the kingdom’s significant crude output capacity, currently at 12.5 million barrels per day (bpd). In September, Saudi pumped 9.704 million bpd.

But it adds to a long list of disruptions in projects between the two neighbouring OPEC members, hampering oil and gas exploration and production from shared fields.

The Khafji field, whose production is around 280,000 bpd to 300,000 bpd in the Neutral Zone between Saudi and Kuwait, was to be brought offline “immediately”, according to a letter signed by Abdullah al-Helal, chairman of Aramco Gulf Operations (AGOC), which operates the Saudi part of the field.

The industry source told Reuters on Sunday the shut down had already taken effect and it was not immediately clear how long it would take to bring it back online after complying with the environmental regulations.

Helal could not be reached for comment and senior Kuwaiti oil officials did not respond to a request for comment.

Venture

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).

In the letter, dated Oct 16 and addressed to Mohammed al-Khatib, executive director of operations of KJO, Helal referred to non-compliance with new environmental air emission standards issued recently by Saudi Arabia’s Presidency of Meteorology and Environment authority.

“The Khafji issue is purely environmental,” said the industry source familiar with Saudi oil policy. He said Aramco and all other companies operating in the kingdom have to comply with orders issued by Saudi’s PME authority.

A Kuwaiti oil trade union on Sunday condemned the unilateral closure by Saudi Arabia of an offshore oilfield jointly operated by the Arab neighbours, calling on the government to intervene.

Fadghoush al-Ajmi, head of the workers union at Kuwait Gulf Oil Co (KGOC), urged ministers to take action