LONDON/DUBAI - Chevron has begun preparations to restart production at the Wafra oilfield in the Kuwaiti-Saudi Neutral Zone, the company said in a statement on Thursday.
Kuwait and Saudi Arabia, both members of the Organization of the Petroleum Exporting Countries (OPEC), agreed last year to end a five-year dispute over the border area known as the Neutral Zone, allowing production to resume at two jointly run fields that can pump up to 0.5% of the world's oil supply.
Saudi Energy Minister Prince Abdulaziz bin Salman told Reuters in December that new production from the oilfields would not affect the countries' commitments under an agreement between OPEC and other producing nations including Russia, known as OPEC+, to curtail global output.
That deal expires in March.
A Kuwait oil official told Reuters earlier this month that 10,000 barrels per day (bpd) of trial oil output from the Wafra field will start by late March, and production is expected to increase to 80,000 bpd from the field within six months of starting trial production.
Output from Wafra is expected to reach 145,000 bpd after a year of restarting.
Wafra has been shut since May 2015 and had output capacity of about 220,000 bpd.
Saudi Arabian Chevron (SAC) operates the field on behalf of the Saudi government together with the Kuwait Gulf Oil Company (KGOC).
"SAC has now embarked on a series of pre-startup activities, which includes efforts to ensure its workforce is ready to safely restart operations and then production," the Chevron statement said.
Production would be gradual and any increase from the zone will be compensated for by a cut from other fields, industry sources have told Reuters.
(Reporting by Ron Bousso; Editing by Elaine Hardcastle and Chris Reese) ((firstname.lastname@example.org; +44 (0) 2075422161; Reuters Messaging: email@example.com))