Crown Prince Mohammed bin Salman comments on oil price and cooperation with Kuwait

Crown Prince Mohammed bin Salman comments on oil price and cooperation with Kuwait
Published: 7 October 2018 - 4:30 a.m.
By: Carla Sertin

Saudi Arabian Crown Prince Mohammed bin Salman told Bloomberg News reporters that he is getting close to restarting production in the Neutral Zone with Kuwait.

“We believe that we are almost close to having something with Kuwait,” the Crown Prince told Bloomberg News. “We believe we can have something soon.”

The Khafji and Wafra fields have a production capacity of 500,000 bpd, which could help make up lost oil production due to US sanctions on Iran. Trump has consistently criticized OPEC for lack of action to lower prices.

Prince Mohammed told Bloomberg News reporters that Saudi Arabia has 1.3mn bpd of space capacity that can be used if necessary. But sanctions on Iran are expected to cut production by as much as 1.5mn bpd of crude; hence the importance of restarting production in the Neutral Zone.

“We’re trying to convince the Kuwaitis to talk about the sovereignty issues, while continuing to produce until we solve that issue,” Prince Mohammed said, referring to a swath of land between the two countries which falls under neither country's jurisdiction; a persistent issue since the country borders were drawn in 1922. The fields closed for unrelated reasons.

“We think a 50-year-old issue is almost impossible to fix in a few weeks. So we’re trying to have an agreement with the Kuwaitis to continue to produce for the next five to 10 years and at the same time, we work on the sovereignty issues,” he said. “It’s good for Kuwait and Saudi Arabia, so I believe it’s a matter of time until it’s solved.”

He noted that one group in the government wants to move forward and produce oil while solving the sovereignty issues, while another group wants to resolve sovereignty issues before restarting production.

He emphasized that Saudi Arabia doesn't make decisions about the oil price, and that that is determined based on trade, supply and demand. The Kingdom currently produces approximately 10.7mn bpd.

"What we are committed in Saudi Arabia is to make sure there is no shortage of supply," said the Crown Prince. "So we work with our allies in OPEC and also non-OPEC countries to be sure that we have a sustainable supply of oil and there is no shortage and that there is good demand, that it will not create problems for the consumers and their plans and development."

 

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