DUBAI: Saudi ARAMCO said on Wednesday a new agreement between Saudi Arabia and Kuwait paves the way for the resumption of oil production in the Neutral (partitioned) Zone shared by the two countries.
Saudi Minister of Energy Prince Abdulaziz bin Salman and Kuwaiti Foreign Minister Sheikh Ahmad Nasser al-Mohammad al-Sabah signed on Tuesday an agreement and a memorandum of understanding in Kuwait, state news agency KUNA said.
The two OPEC members halted production at the jointly operated Khafji and Wafra fields, which together produce some 500,000 barrels of oil a day (bpd) or up to 0.5per cent of the world's oil supply, in 2014 and 2015, respectively.
"With the signing of this new accord, both parties have reached consensus that now is the right time to resume production in this zone," ARAMCO's President and CEO Amin Nasser was quoted as saying in a statement by ARAMCO.
AGOC, a subsidiary of the giant Saudi state oil firm, operates Khafji oil field alongside Kuwait's Gulf Oil Company.
"Both sides will work to ensure production resumption at the earliest opportunity," he added.
Oil output in the Neutral Zone, which dates back to 1920s treaties establishing regional borders, is divided equally between Saudi Arabia and Kuwait.
(Reporting by Dahlia Nehme; Editing by Gareth Jones and Hugh Lawson)