The signature of the governments of Kuwait and Saudi Arabia on the development report of the Al-Durra gas field in the Arabian Gulf, brought back to the fore the crisis of this field, a field that formed a focus of tension with Iran because it is located in a disputed maritime border area (according to Tehran) that has not yet been demarcated despite Kuwait’s claims and its readiness for international arbitration in the field crisis in light of Iran’s repeated intransigence, as well as in the neutral zone between Kuwait and Saudi Arabia, which includes the Khafji and Wafra fields, and their production is estimated between 500-600 thousand barrels of oil per day, divided equally between the two countries.
According to a local Arabic daily, the two countries had previously signed a joint memorandum of understanding in December 2019 on the joint field all the way to the last minute in March 2022. This study deals with the assessment of the situation around the recent Al-Durra field crisis, the possible scenarios, and the recommendations necessary to confront the seriousness of the crisis.
The importance of the field and the sensitivity of its situation stems from the fact that it is a joint gas field in a joint offshore area (the extension of the neutral zone) between Kuwait and Riyadh. Its huge natural gas production capacities estimated at 11 trillion cubic feet of natural gas and nearly 300 million barrels of oil made it the focus of Tehran’s ambitions, which disputes part of its ownership within its maritime borders.
The field was discovered since the 1960s, but the border dispute delayed the investment and development of the field during the past decades, up to the end of last March, when the Kuwaiti Oil Minister Muhammad Al-Faris agreed with Saudi Energy Minister Abdulaziz bin Salman on a development report for the field in which the Khafji Joint Operations Company with Aramco and the Kuwait Oil Company will conduct operations to bring the field to a production capacity of one billion cubic feet and 84,000 barrels of condensate per day by selecting a consultant to carry out engineering studies, techniques, methods and modern means to achieve effective and successful performance in terms of capital, operational and environmental aspects.
Regarding the production mechanism, the output will be divided equally between the two partners, taking into account the option of offshore separation, whereby the share of each of the two partners will be separated at sea, and from there the Aramco Gulf Operations Company’s share of natural gas, gas liquids and condensates will be sent to the company’s facilities in Khafji, and the Kuwait Gulf Oil Company’s share of natural gas liquids and condensate will be sent to its facilities in Al-Zour.
The common spot witnessed a tripartite dispute between Kuwait, Riyadh and Tehran during the past years while the Kuwaiti-Saudi dispute tended to calm down in the neutral zone and then in the Al-Durra field; the crisis with Iran appears to be continuing, especially with the developments of the past days that came as a complement to an escalating crisis over the past two decades.
The dispute with Iran over the gas field dates back to the 1960s, when Tehran granted the concession for exploration and exploitation to the Iranian-British Oil Company in parallel with Kuwait granting the exploration concession to Royal Dutch Shell, in a way that caused the two concessions to overlap in the north of the Durra field, which has since turned into a focus of tension that caused the delay in its investment and Kuwait benefiting from its proceeds.
The year 2011 witnessed the beginning of Iranian gas exploration in the field; this prompted Kuwait and Saudi Arabia to conclude an agreement to demarcate their maritime borders and plan the development of joint oil reservoirs. The following years witnessed discussions to settle the dispute over the continental shelf area on the maritime borders between the two countries, but they did not lead to any result.
On August 26, 2015, the Kuwaiti Foreign Ministry summoned the charge d’affaires of the Iranian embassy to protest Iran’s proposal for two projects to develop the Durra oil field, according to the Kuwaiti Foreign Ministry.
At the time, the Kuwaiti Foreign Ministry said that it had submitted a protest note because of reports that the National Iranian Oil Company had issued a bulletin on oil investment opportunities in Iran, including opportunities to invest in parts of the extension of the Durra field, located in the overlapping offshore area that has not been demarcated between Kuwait and Iran.
In December 2019, Kuwait and Saudi Arabia signed a memorandum of understanding that “included joint work on developing and exploiting the Al-Durra field,” where the new agreement came in March 2022 as an actual translation of it.
The agreement to develop the field opened a diplomatic debate about the ownership of the field and the franchisees in its revenues, especially with Tehran claiming that it has a right in the field and its rejection of the recent minutes between Kuwait and Saudi Arabia.
After signing the field development report, and on March 26, the Iranian Foreign Ministry announced its country’s right to invest in the Al-Durra gas field, jointly with Kuwait and Saudi Arabia. Iranian Foreign Ministry spokesman Saeed Khatibzadeh confirmed on Twitter that Arash (Al-Durra gas field) is a joint field between Iran, Kuwait and Saudi Arabia, and parts of it are located within the border waters between Iran and Kuwait, considering that his country reserves the right to exploit the joint gas field.
The Iranian Foreign Ministry also confirmed, according to the spokesman, that Tehran is ready to enter into negotiations with Riyadh and Kuwait on how to invest in this common field “in conjunction with continuing bilateral negotiations with Kuwait within the framework of the results of previous negotiations with it on defining the borders of the continental shelf, as well as the start of tripartite negotiations” to determine the triple point between these countries,” according to Iranian media.
Foreign Minister Sheikh Ahmed Al-Nasser affirmed that Iran is not a party to the Al-Durra gas field, considering in his statements on March 29 that the field is purely Kuwaiti and Saudi. As for the negotiations previously mentioned by the Minister of Foreign Affairs, he made it clear that his intention was to demarcate the continental shelf between Kuwait, Riyadh and Tehran.
A joint statement by the Saudi and Kuwaiti foreign ministries affirmed that the two countries, “as one negotiating party”, renew Iran’s call to demarcate the eastern borders of the submerged divided zone between the two Gulf countries. The sensitivity of timing associated with developing the field and seeking to exploit it by Saudi Arabia and Kuwait, in parallel with Iran’s affirmation of its rejection of any development or investment in the field without its presence, is linked to a number of variables:
1 – The nuclear agreement and the Vienna negotiations between the Americans and Tehran
2 – The global energy crisis, which intensified with the Russian military operations in Ukraine
3 – Bickering and the supposed dialogue between Riyadh and Tehran on a number of regional issues and the issues of the nuclear agreement.
As a result of these intersections, it is not excluded that Tehran’s raising of the file came with the aim of politically exploiting the issue of the field, and using it as a negotiating card in front of the Gulf states to ensure certain concessions on the issue of the nuclear program and other files such as Yemen and others.
Iran’s continued ignoring the two countries’ demands to demarcate the maritime borders, and if it continues with plans to develop and invest the field’s reserves, suggests a superposed crisis in terms of energy security and the security of the Gulf countries (Kuwait and Saudi Arabia) in pursuit of Tehran achieving strong economic returns and political gains in terms of the nuclear agreement and regional penetration.
Thus, we are faced with a number of scenarios related to the field crisis:
1 – Iran’s desire to invest part of the field’s revenues, and here we will witness an Iranian insistence on confrontation and claiming its alleged rights to extract Dora gas. Accordingly, it may resort to a number of options.
2 – Threatening to use direct and indirect force in the field crisis
3 – Obstructing the work of companies developing and investing in the field through direct contact, piracy and the use of mercenaries
4 – Protection and entry of private companies in Iran to extract gas from the field, accompanied by the protection force and taking advantage of the backstage of the nuclear negotiations and Washington’s efforts to compensate Russian oil and gas
5 – Inciting Iraq to confront and reject what is happening in the joint Kuwaiti-Saudi field and demand a share for Baghdad in the field with Iranian support (to weaken the Gulf position).
6 – Iran continues to protest, reject, and seek to achieve negotiating gains with the Gulf states and the Americans, as it abandons its demands for the field in exchange for solving the border demarcation problems with Kuwait and Saudi Arabia as a barter movement in which it does not give up the field for free.
