The Economist Intelligence Unit, affiliated with The Economist magazine, stated in an analysis titled “Border Talks between Iran and Kuwait Could Facilitate the Development of Gas Production,” that the two countries held talks in mid-March about their maritime borders, a few days after Iran’s historic reconciliation with Saudi Arabia.
The Unit added, “Resolving the long-standing border demarcation problem could relieve tension in Saudi Arabia and Kuwait’s plans to develop the giant offshore Durra gas field in the Divided Neutral Zone, of which Iran says the northern part is located in its territorial waters,” reports Al-Rai daily.
The Economist Intelligence expects that “resolving the dispute will lead to boosting the growth of Kuwait’s gas exports in the long term,” while the analysis indicated that “Iran’s opposition has for a long time impeded attempts to develop the field, whose gas reserves are estimated at 10-11 trillion cubic feet.”
The Economist added: “Kuwait hopes that the increasingly improving geopolitical climate in the Gulf will promote the development of its offshore gas fields.”
She pointed out that “bilateral tensions eased significantly after Kuwait and Iran resumed diplomatic relations between them in August 2022, while talks between senior Kuwaiti and Iranian officials on maritime borders came 3 days after the Kingdom and Tehran agreed to end 7 years of diplomatic estrangement between them.”
The Economist considered that “improving relations between Iran on the one hand and Saudi Arabia and Kuwait on the other hand could encourage the two Arab countries to offer joint talks on border issues.”
The Unit pointed out that “the Kuwaiti-Iraqi talks on the disputed maritime borders between them have made progress in recent months, which prompts the Kuwaiti government to hope that that success will be repeated in the dispute with Iran.”
The unit stated that “Kuwait and Saudi Arabia revived, in December 2019, plans to develop the Durra field, in parallel with resolving the dispute over broader issues related to the neutral zone that had caused the closure of two Kuwaiti oil fields.”
The new project provides for the production of 1 billion cubic feet per day of gas, which Kuwait suffers from a shortage of supplies for internal consumption.
The “Economist” considered that “the prospects for progress in resolving the border dispute are positive, given that Saudi Arabia and Kuwait’s need for gas is increasing at a time when global prices are rising and demand is increasing from European and Asian importers.”
However, the magazine pointed out that “a solution to the border problem will not guarantee the development of the Dorra field, after a previous attempt was abandoned in 2013 as a result of the position of the opposition in the Kuwaiti National Assembly.”
And while the “Saudi-Iranian agreement reduces these risks in the short term, their relationship remains threatened. Any signs of deterioration in this relationship will raise the concerns of the National Assembly and lead to the threat of settlement agreements.
The Economist Intelligence concluded, “It is expected that Kuwait and Iran will resolve the border dispute between them during the years 2023-2027, while the risk of a possible collapse of Saudi-Iranian relations remains … but if the agreement remains, then Saudi Arabia and Kuwait’s urgent need to secure new supplies of gas at reasonable prices indicates that The possibility of launching the process of developing the Al-Durra field”, within the period of Al-Wahda prediction.