Saudi Arabia and Kuwait seek to exploit the potential of the Al-Durra gas field

Saudi Arabia and Kuwait seek to exploit the potential of the Al-Durra gas field

Saudi Energy Minister Prince Abdulaziz bin Salman with his Kuwaiti counterpart Mohammed Al-Fares. (Provided)

The foreign ministries of Saudi Arabia and Kuwait issued a joint statement last month affirming their right to develop and “exploit the natural resources” of the Al-Durra gas field in the Kuwaiti-Saudi neutral zone. of the Persian Gulf. This should be welcomed positively by the global community, especially by European countries, whose natural gas supplies are under severe strain due to the war in Ukraine. While the EU, which gets around 40% of its gas from Russia, has imposed tough sanctions on Moscow in response to its attack on Ukraine, without a reliable alternative supply of oil and natural gas it cannot not afford to follow the United States in the total boycott of Russia. fuel.

The two countries also reiterated a previous invitation to Iran to negotiate the eastern border of the divided submerged area. The initial invitation, which received no response, was sent following Tehran’s assertion that the March 21 declaration by Kuwait and Saudi Arabia to initiate development in the region was illegal, despite the signing of a memorandum of understanding in December 2019. Iranian Foreign Ministry spokesman Saeed Khatibzadeh claimed that parts of Al-Durra – which Iran calls Arash – are located in areas between Iran and Kuwait whose borders have not been defined.

Kuwait Petroleum Corporation and Saudi Arabia’s Aramco Gulf Operations Company had announced the joint venture through Saudi Arabia’s Minister of Energy and Kuwait’s Minister of Petroleum, Electricity, Water and Renewable Energy. It is positive to see a decision to include renewable energy in this ministerial role to demonstrate Kuwait’s commitment to combating climate change and protecting the health of people and the planet.

The Al-Durra field is not new – it was discovered in 1967 and is estimated to contain gas reserves of around 20 trillion cubic feet. Last November, the Kuwait Petroleum Corporation commissioned a consultant to assess the safest and most cost-effective ways to develop the site and separate the stakeholder share in accordance with previous agreements and the MoU. The Kuwaiti-Saudi contract that was signed last month plans to extract up to 1 billion cubic feet of pipeline-grade natural gas per day, with an additional 84,000 barrels per day of condensate. By-products will include natural gas liquids such as butanol and propane.

Discord is likely to have erupted following the sharp rise in the price of natural gas

Dr. Bashayer Al-Majed

However, Khatibzadeh says that according to international regulations and procedures, the three nations must be included in the negotiations and have a share of the opportunities to exploit the wealth offered by the gas field. Iran insists that the Saudi-Kuwaiti deal contravenes previous agreements and is therefore invalid.

Controversy is likely to have erupted following the sharp rise in the price of natural gas due to limited supply across Europe following the war in Ukraine, which is expected to boost profits to be made from Al-Durra. Iran does not want to risk losing the chance to exploit this opportunity while it lasts. Indeed, local media reports that Iranian Oil Minister Javad Owji has announced that Iran will start drilling in the Arash field, while Khatibzadeh has claimed that Tehran has the right to exploit the Arash’s resources. the region. If true, tensions could further escalate between the Kuwaiti-Saudi partnership and Iran.

This follows acrimony that has already built up after the March attack on a Saudi oil refinery by the Houthi rebel group in Yemen. Previous UN investigations have concluded that Iran was providing military aid to the Houthis. Riyadh stressed that such attacks pose additional risks to the safe delivery of oil from the Kingdom to the rest of the world – the suggestion being that it is in everyone’s interest to support the fight against the Houthis.

Although US President Joe Biden and British Prime Minister Boris Johnson have both asked Saudi Arabia to increase its oil and gas production – the Kingdom and the United Arab Emirates are the only OPEC countries with sufficient spare capacity to meet Europe’s needs if the EU boycotts Russian energy – Riyadh opted to stick to its OPEC+ agreement (to which Russia is a party) to limit the increase in its production at 400,000 barrels per day, with an additional 32,000 barrels from May 1. This aims to limit inflation and stabilize prices after the COVID-19 pandemic drastically reduced demand for the oil. However, Saudi Aramco, which posted record profits in 2021, agreed last month to increase oil production spending from $31.9 billion to $40 billion to $50 billion this year.

If Saudi Arabia and Kuwait can come to an agreement with Iran to formalize the eastern border of the divided submerged area to allow them to extract natural gas from Al-Durra without escalating tensions, it could give a boost to Gulf economies and help ensure a secure supply for Europe. There is huge potential in Al-Durra waiting to be realized.


Dr. Bashayer Al-Majed is Professor of Law at Kuwait University and Visiting Scholar at Oxford. Twitter: @BashayerAlMajed

Disclaimer: The opinions expressed by the authors in this section are their own and do not necessarily reflect the views of Arab News

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