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Chevron readies to resume pumping oil from Saudi-Kuwaiti Neutral Zone Wafra field

February 21/2020

MOSCOW (MRC) -- Crude oil from the Wafra field in the Neutral Zone shared by Saudi Arabia and Kuwait could flow again as soon as this weekend after a nearly five-year hiatus, reported S&P Global with reference to joint operator Chevron's statement on Thursday saying it is preparing to restart operations.

Saudi Arabian Chevron, which operates the onshore field with Kuwait Gulf Oil Company, said it "has now embarked on a series of pre-start up activities, which includes efforts to ensure its workforce is ready to safely restart operations and then production."

Kuwaiti media reported Thursday that the two countries had authorized the resumption of joint operations at the field starting Sunday.

Chevron did not provide a timeline for when production would begin but said in its statement that while the field has been shut down, it has carried out "a robust maintenance and preservation program to maintain operational readiness."

The field, operated jointly by Kuwait Gulf Oil Company and Saudi Arabian Chevron, has been shut since 2015.

Wafra and the offshore Khafji field, which is jointly run by Aramco Gulf Operations Co. and KGOC but has been shuttered since October 2014, are at the center of a political dispute between the two countries that was resolved only in December after months of talks.

The fields are located in the Neutral Zone, an area straddling the border between Saudi Arabia and Kuwait, who agreed in 1970 to co-manage and share crude production equally.

Earlier Thursday, the International Energy Agency said output at Wafra could reach 80,000 b/d by the fourth quarter and then 145,000 b/d in a year, while Khafji production could hit 60,000 b/d by August and 175,000 b/d in a year.

Both Kuwait and Saudi Arabia have said the resumption of oil production from the fields would not clash with their output quotas, under the supply cut accord agreed by OPEC, Russia and nine other allies.

Saudi Arabia pumped 9.74 million b/d, according to the latest S&P Global Platts survey of OPEC production, well below its quota of 10.14 million b/d. Kuwait, meanwhile, produced 2.66 million b/d in January, in line with its cap, according to the survey.

We remind that in March 2018, Chevron Phillips Chemical Company LP successfully introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.

As MRC wrote before, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, Chevron, Chevron Phillips, Russia, Saudi Arabia, USA.
Category:General News
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