March 11, 2020 / 3:18 PM / 20 days ago

Kuwaiti-Saudi Khafji oilfield to produce 100,000 bpd by end April

KUWAIT, March 11 (Reuters) - Production from the joint Kuwaiti-Saudi oilfield al-Khafji is expected to surpass 100,000 barrels per day (bpd) by the end of April and reach 175,000 bpd by the end of the year, a senior Kuwaiti oil official told Reuters.

Gulf OPEC producers Saudi Arabia and Kuwait agreed last year to end a five-year dispute over the shared Neutral Zone area, allowing the resumption of output at two jointly run fields - Khafji and Wafra - that can pump up to 0.5% of world oil supply.

“The total production of the two fields by the end of this year will reach 320,000 bpd,” said Abdullah Mansi Al-Shammari, Deputy CEO Finance and Management at Kuwait Gulf Oil Company.

The Neutral Zone is expected to reach full output capacity of 550,000 bpd before the end of 2021, he told Reuters late on Tuesday.

Trial production of 10,000 bpd began at Khafji last month and appears to be ramping up at a faster pace than first expected. Last month, an official said the field would be pumping 60,000 bpd by August.

Al-Shammari said Khafji was currently producing around 70,000 bpd. “It is scheduled to cross 100,000 by the end of April, to reach 175,000 bpd by the end of 2020,” he said.

Saudi Arabia and Kuwait had agreed that trial production of 10,000 bpd at Wafra would begin in April, he said, adding the field would produce 145,000 bpd by the end of the year.

Asked if the firm had been instructed to accelerate output, Al-Shammari said the company was moving according to the agreed schedule under the joint production plan.

Saudi Arabia has announced it would raise oil output to a record high in April and boost production capacity after the collapse on Friday of a deal between OPEC and some other oil producers - notably Russia - on output curbs that had propped up prices since 2016.

Khafji is operated by Al-Khafji Joint Operations Co, a joint venture between Kuwait Gulf Oil Company and AGOC, a subsidiary of state oil giant Saudi Aramco. U.S. oil major Chevron operates Wafra on behalf of the Saudi government. (Reporting by Ahmed Hagagy; Writing by Dahlia Nehme; Editing by Ghaida Ghantous and Mark Potter)

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