Kuwait & Iraq Agree on Border Oilfields

Kuwait and Iraq have reached an initial agreement on sharing border oil fields and to allow an international oil company to develop them, Kuwait's Oil Minister said. Sheikh Ahmad Al Abdullah Al Sabah told reporters the agreement called for an international oil company to drill for oil in those fields for both countries, adding no company had been chosen yet.

He said both countries had agreed on the pact in principle. "We have signed it from Kuwait's side. They (Iraqis) will be signing it maybe this week or next week," he said. When Iraq invaded its small Arab neighbour 20 years ago, Baghdad accused Kuwait of stealing billions of dollars worth of oil from these fields through horizontal drilling. Kuwait denied the charge.

The pact will serve "to avoid any future claims that one of these countries ... is overutilising" the joint fields, Sheikh Ahmad said. Several fields straddle the desert border that was demarcated by the United Nations after the 1991 Persian Gulf War that liberated Kuwait. Kuwait resumed ties with Iraq since the 2003 US invasion of Iraq toppled Saddam Hussein, who ordered the invasion of Kuwait.

Sheikh Ahmad said he was satisfied with current oil prices. "We do appreciate what is happening in the international market and the international economy and we are satisfied with the current prices," he said, adding he expected prices to "pick up" partly because of high demand in winter.

US crude was trading above US$71 on 25 August 2010. The minister said the country's highest oil policy body, the Supreme Petroleum Council, will "finalise" a much-delayed plan to build a 615,000 bpd refinery in Kuwait. He declined to say whether "finalise" meant the final approval of the US$15 billion project that was scrapped last year on opposition from several lawmakers who questioned the tender process.- Arabian Business