Al-Durra’s potential set to be tapped
The foreign ministries of Saudi Arabia and Kuwait last month released a joint statement affirming their right to develop and “exploit the natural resources” of the Al-Durra gas field in the Kuwaiti-Saudi neutral zone in the Arabian Gulf.
This is likely to be met positively by the global community, particularly by European countries, whose supplies of natural gas are being stretched due to the war in Ukraine.
The two countries also repeated a previous invitation to Iran to negotiate the eastern border of the submerged divided zone.
The initial invitation, which did not receive a response, was sent following Tehran’s claim that Kuwait and Saudi Arabia’s statement of March 21 to initiate development of the region was illegal, despite a memorandum of understanding being signed in December 2019.
Iranian Foreign Ministry spokesperson Saeed Khatibzadeh claimed that parts of Al-Durra — which Iran calls Arash — are located in areas between Iran and Kuwait whose boundaries have not been defined.
The Al-Durra field is not new — it was discovered in 1967 and is estimated to have gas reserves in the region of 20 trillion cubic feet.
Last November, the Kuwait Petroleum Corporation had a consultant assess the safest and most economical ways to develop the site.
The Kuwaiti-Saudi contract that was signed last month details plans to extract up to 1 billion cubic feet of pipeline-quality natural gas per day, with an additional 84,000 barrels per day of condensates.
It is likely that the contention has flared up as a result of the sharp rise in the price of natural gas due to the limited supply across Europe as a result of the war in Ukraine, which is set to increase the profits to be made from
Al-Durra.
Iran does not want to risk losing out on the chance to exploit that opportunity while it lasts.
Indeed, local media reports state that Iranian Oil Minister Javad Owji has announced Iran is to begin drilling in the Arash field.
If this is true, tensions could build further between the Kuwait-Saudi partnership and Iran.
Despite US President Joe Biden and UK Prime Minister Boris Johnson both asking Saudi Arabia to increase its oil and gas production, Riyadh opted to stick to its OPEC+ deal (to which Russia is a party) to limit its production increase to 400,000 barrels a day, with a further 32,000 from May 1.
This aims to restrict inflation and stabilize prices after the COVID-19 pandemic greatly reduced demand for oil.
If Saudi Arabia and Kuwait can agree with Iran to formalize the eastern border of the submerged divided zone to enable them to extract natural gas from Al-Durra without exacerbating tensions, it could give a boost to the Gulf economies and help secure a safe supply for Europe. There is huge potential in Al-Durra that is waiting to be realized.