Saudi approves agreement with Saudi Arabian Chevron on Neutral Zone

FILE PHOTO: An entrance sign at the Chevron refinery, located near the Houston Ship Channel, is seen in Pasadena, Texas, U.S., May 5, 2019. REUTERS/Loren Elliott

CAIRO (Reuters) - Saudi Arabia’s cabinet approved an agreement with Chevron Saudi Arabia (SAC) regarding the Neutral Zone between the kingdom and Kuwait, the state news agency said late on Tuesday.

“It approved ... amending and extending an agreement between the Saudi government and Chevron Saudi Arabia in the Neutral Zone,” the cabinet statement said, without giving further details.

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 the jointly run Wafra and Khafagi oil fields that can pump up to 0.5% of the world’s oil supply.

Crude oil production resumed early July at the Wafra oilfield, shared by Kuwait and Saudi Arabia.

SAC operates the Wafra oil field on behalf of the Saudi government together with the Kuwait Gulf Oil Company (KGOC).

Reporting by Nayera Abdallah and Marwa Rashad,; Editing by Chris Reese and Richard Pullin