Kuwait Spars With Saudis Over Joint Oilfield

Kuwait Spars With Saudis Over Joint OilfieldKuwait Spars With Saudis Over Joint Oilfield

Kuwait called on Saudi Arabia to resume production at the disputed Khafji border oilfield, saying its neighbor will be held responsible for revenue losses, reports said on Tuesday.

Kuwaiti Oil Minister Ali al-Omair told his Saudi counterpart Ali al-Naimi in a letter the Saudi decision to halt production at Khafji violated a 50-year-old agreement, AFP reported.

The move "will inflict heavy losses on Kuwait which will be borne by the Saudi government," Kuwait's Al-Rai newspaper quoted the letter as saying.

Production at the offshore Khafji Oilfield, which pumped over 300,000 barrels per day and was jointly operated by the two countries, was halted in October.

The dispute has been a blow to Kuwait which, unlike its much larger neighbor, has little spare output capacity to compensate for drops in production.

Kuwait said Saudi Arabia unilaterally stopped production due to pollution concerns even though it was entitled to five years' notice under the joint agreement.

Omair said the Saudi halt violated a 1965 agreement to share output in the neutral zone between the Persian Gulf neighbors and also breached the joint operation deal signed in March 2010. In May, work at another jointly operated oilfield in Wafra was halted for maintenance but never resumed. The two countries began talks in June to resolve the dispute.

Industry sources say Kuwaiti authorities were unhappy with Saudi Arabia for renewing an operating agreement for the Wafra field with Saudi Arabian Chevron for 30 years in 2009 without consulting them.

In response, it stopped issuing or renewing visas for Chevron foreign employees.