Chevron in last stage of tests in Saudi oilfield

KHOBAR, Saudi Arabia, Nov. 4 (Reuters) - U.S. oil major Chevron (CVX.N) has started the third stage of testing a improved oil recovery technique in the neutral zone between Saudi Arabia and Kuwait, it said on Wednesday.

Chevron has been testing the impact of steam flooding in the Wafra oilfield to help boost output of heavy oil. Steam raises the temperature below ground and loosens up crude that is otherwise difficult to pump.

The $340 million pilot project (LSP), is the third and "final test in a nearly 10-year staged assessment to determine the technical and economic viability of thermal recovery projects in the Eocene heavy-oil carbonate reservoir," Chevron said in an e-mailed statement.

This stage, which achieved first-steam injection in June, would prove if Chevron can use this technology in full-field development.

"Chevron is applying new technologies to free-up in commercial quantities the potential of extra heavy oil from carbonate," George Kirkland, Executive Vice President for Global Upstream and Gas at Chevron said.

"It is a potential in the onshore Partitioned Neutral Zone and elsewhere measured in billions of barrels of new energy resources, billions of dollars in investments and revenues," Kirkland added.

This stage, that would last for three years includes 16 injection wells, 25 producing wells, 16 observation wells and installing water treatment and steam generation and distribution facilities, the statement added.

Saudi Arabia and Kuwait share the estimated 550,000 barrels per day (bpd) output from the Neutral Zone. Saudi Arabia has extended Chevron's concession in the neutral zone to 2039.

(Reporting by Reem Shamseddine, editing by William Hardy)