Kuwait terminates AOC contract for Khafji deal
Posted: 31 December 2007
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Japan’s AOC Holdings’ five-year agreement with Kuwait to provide technical services including assistance for operations in the offshore Neutral Zone, will expire on January 4, 2008, the holding company of Arabian Oil Co., has announced.
Arabian Oil tried to renew the contract, but failed to reach a consensus due to disagreement between Kuwait and Saudi Arabia over their basic policy of securing human resources in the oil field, AOC said in a statement.
Under the service agreement, Arabian Oil has provided technical assistance for operations in the Khafji oil field, which straddles the border between Kuwait and Saudi Arabia , and personnel training.
According to the company, the loss of the contract will not affect the crude oil sales agreement which allows Japan to purchase 100,000 barrels a day of output from the Khafji field until 2023.
Arabian Oil lost its concession on the Saudi side of the Khafji field in February 2000, despite the full backing of the Japanese government.
In January 2003, it also lost the concession for the Kuwaiti portion, but sealed a technical service deal in 2002 with the Kuwaiti government. Arabian Oil started development of the Khafji oil field in 1960, one of the largest oil fields developed by a Japanese oil company, producing 270,000 barrels of crude oil per day at one time. |
