The agreement over a shared region could bring more oil to the global market and benefit Chevron.
The agreement is likely to be seen as the latest victory for Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, center.Credit…Ronald Zak/Associated Press
Saudi Arabia and Kuwait said Tuesday that they were ending a long-running dispute over oil fields in a strip of land between the two countries.
The agreement was reported in a Twitter message by the Saudi oil ministry and on the website of the official Kuwait News Agency.
The deal between the two Persian Gulf producers should gradually allow around 500,000 barrels of oil to come back to the market per day. The availability of new supplies may be something of a mixed blessing because the Organization of the Petroleum Exporting Countries and Russia are already reducing output to prop up prices. Analysts said that the Saudis and Kuwaitis would probably compensate by dialing back output at other fields. On Tuesday morning oil prices were little changed, coming in around $66 a barrel for Brent crude, the main international benchmark.
A pact between the two countries may also benefit Chevron, the American oil giant, which has an agreement to operate about half of the production in the area, known as the neutral zone. The dispute has been costing Chevron around 100,000 barrels a day in lost production.
The agreement is likely to be seen as the latest in a series of wins for Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, who is an older half brother of Crown Prince Mohammed bin Salman, the chief Saudi policymaker.
Since taking the job in September, Prince Abdulaziz, a veteran energy official, has helped see through the initial public offering of the country’s national energy company, Saudi Aramco, which is the world’s largest oil company. He also presided over the rapid restoration of production at Aramco after aerial attacks blamed on Iran temporarily slashed output by more than 50 percent.
Earlier this month, the prince persuaded fellow OPEC members and Russia to agree to new output cuts aimed at bolstering flagging oil prices at a meeting in Vienna.
By – Stanley Reed –
