(MENAFN- Arab Times) Kuwait is working to raise oil production from alternative oilfields to compensate for the loss of 250,000 barrels per day in a row with Saudi Arabia, an official said Monday.
"Kuwait Oil Company is trying its best to concentrate on high production fields" to dig more wells in a bid to compensate" for the loss in neutral zone production, head of marketing at Kuwait Petroleum Corp Jamal al-Loughani told reporters.
Kuwait lost the production after a dispute with neighbouring Saudi Arabia led to the closure of the neutral zone Khafji and Wafra oilfields.
The two fields together pumped more than 500,000 bpd which was equally shared between the Gulf neighbours.
"We have an ambitious plan to raise output by the end of the year to the level before" the stoppage, Loughani said.
Kuwait has been pumping around 2.9 million bpd for several months.
Khafji was shut down by the Saudi side in October over environmental issues and Wafra was closed last week for a two-week maintenance. Sources said production will not resume before the dispute is resolved.
According to the Kuwaiti daily Al-Jarida, the emirate has requested arbitration in the dispute.
The halt in production is a blow to Kuwait. Unlike its much larger neighbour, it has little spare output capacity to compensate.
Industry sources say Kuwaiti authorities were unhappy with Saudi Arabia for renewing an agreement with Saudi Arabian Chevron for 30 years in 2009 without consulting them.
In response, it has stopped issuing or renewing visas for Chevron employees.
The halt to output comes amid a worldwide supply glut that has driven down prices of crude.
Meanwhile, global crude oil prices are not expected to fall in the second half of 2015, Kuwait's OPEC governor said on Monday, and any surplus supply was due rather to shale producers rather than OPEC.
"It is expected that there will be some sort of a balance in the oil market in the second half of 2015 which will support prices," Nawal al-Fuzaia told reporters in Kuwait city.
"I don't see a fall in oil prices, unless there was sudden developments in the market like supply disruption which is unlikely or an unexpected growth in the supplies from other producers outside OPEC," she added.
OPEC production had not increased by more than 200,000 to 400,000 barrels per day above its 30 million bpd cap since 2011, Fuzaia said.
The Organization of the Petroleum Exporting Countries said its oil output rose further in April by 18,000 bpd, due to record output in top exporter Saudi Arabia and increases in Iraq and Iran.
Fuzaia also said it was still too early to talk about OPEC's policy decision when the group meets next on June 5.
OPEC delegates have told Reuters it was unlikely it would cut production in June due to the rise in oil prices and a better-than-expected global demand.
Speaking in Malaysia, a senior Iranian official said on Monday it was unlikely OPEC would cut output in June.
Iran, along with Venezuela and Algeria, has repeatedly called for OPEC to shore up low prices that have eaten into producers' oil revenues.
In November, OPEC, led by Saudi Arabia, decided to maintain output and defend its market share against rising supplies from US shale and other major non-OPEC producers such as Russia.
That decision has succeeded in curbing supplies from high cost producers and supported prices, Fuzaia said.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.