Kuwait set to pump 3.15 million b/d in April as Neutral Zone exports take off

London — OPEC member Kuwait is planning to ramp up its oil output to as high as 3.15 million b/d, up by almost 500,000 b/d in the past two months, bolstered by the resumption of production from the fields in the Neutral Zone shared by Kuwait and with Saudi Arabia.

Kuwait Petroleum Corporation's Deputy Chairman Hashem Hashem said output in March had surged to near 2.9 million b/d and it would reach 3.15 million b/d in April, according to state-run KUNA new agency. In February, Kuwait produced 2.67 million b/d, according to official data.

"[Kuwait] has started producing heavy crude oil from the brotherhood fields and tapping into the resources of Khafji field in the Neutral zone," Hashem was cited as saying.

The announcement coincides with the first exports in over five years from the Neutral Zone. It also comes three days after OPEC+'s existing output curbs expired but ahead of an emergency meeting by the producer group on Monday aimed at agreeing on a new output constraint deal.

A second crude cargo from the Neutral Zone shared by Kuwait and with Saudi Arabia is scheduled for this weekend, as production from the Al-Khafji fields is already ramping up, according to sources and shipping data.

This is a total of 2 million barrels of crude that is being exported in the first week of the month, sources added, showing that production from these fields has already ramped up.

Al-Khafji is one of two major fields in the Neutral Zone, along with the onshore Wafra that had been shuttered by a political dispute between Saudi Arabia and Kuwait, before a deal brokered in December paved the way for their restart.

The fields, which have a combined capacity of 550,000 b/d, are in an area straddling the border between the two countries, which agreed in 1970 to co-manage and share crude production from the zone equally.

First exports

Earlier Friday, the country's oil minister Khaled al-Fadhel confirmed to KUNA that the first exports from the Neutral Zone were indeed taking place and Kuwait would be sending the crude to an Asian customer.

The VLCC Dar Salwa is estimated to reach the Ras al-Khafji terminal on April 4 to load a cargo, data from Platts cFlow, trade flow service, showed.

This the second export after the Suezmax tanker Monte Toledo loaded 1 million barrels of crude at the Ras al-Khafji terminal Thursday, according to data from Platts cFlow.

The tanker arrived at the terminal on Wednesday, the first tanker to have arrived at the port in a number of years, according to Platts cFlow data.

The Monte Toledo had been placed on subjects on a Saudi Arabia to East voyage for early-April loading dates, according to shipbroker reports seen two weeks ago by Platts.

Al-Khafji, shuttered since 2014, is jointly owned by Saudi Arabia's Aramco Gulf Operations Co. and Kuwait Gulf Oil Co., a unit of state-run Kuwait Petroleum Corp. Wafra, offline since 2015, is operated by KGOC and Saudi Arabian Chevron. The field is undergoing preparations for a restart, Chevron said in February.

Prior to production suspension, Al-Khafji crude had an API gravity of 28.5 degrees and 2.85% sulfur content, and Wafra had an API of 24.5 degrees and 3.88% sulfur content.