Kuwait Signs Oil Pact with Iraq

Kuwait has signed an agreement to share oil from cross-border fields with Iraq and is waiting for its northern neighbour to reciprocate, the emirate’s oil minister has said, according to a report from The National.

The deal could help to smooth the often thorny relationship between the two countries 20 years after Saddam Hussein’s armies occupied Kuwait – an incursion that sparked the First Gulf War.

A committee representing both governments met this month, the Kuwaiti minister, Sheikh Ahmed Abdullah Al Sabah,said last Wednesday.

“The Kuwaiti side already signed the declaration, and now we’ve sent it to Iraq to sign it,” Sheikh Ahmed said.

The agreement stipulated that a company had been created to work on both sides of the border “so nobody will claim that one side took more oil than the other”, he said.

“An international adviser will come and look at the field and say how much is allowed [for] this side and the other side, and the cost will be shared equally,” Sheikh Ahmed said.

Production from cross-border oilfields has been a problem between the Gulf neighbours. In the run-up to the 1990 invasion, Iraq accused Kuwait of stealing its oil by slant-drilling into the Iraqi side of the giant Rumaila oilfield – which is known as Ratqa south of the border – to steal its oil. Kuwait denied the allegation.

Whether the allegation was true or not, Saddam used it as an excuse to invade Kuwait.

After an eight-year war with Iran, Iraq was left heavily in debt to Kuwait and Saudi Arabia.

Iraq also accused Kuwait of producing more oil than allowed by OPEC’s quota system, driving down international oil prices and hurting the Iraqi economy. Manouchehr Takin, an analyst for the London-based Centre for Global Energy Studies who wrote the 2008 report “Stealing Iraq’s Oil: Is the Iraqi Press Right?”, said Rumaila was the most contentious of several oilfields that straddle the border.

A high rate of production on one side of the border essentially “sucks the oil from the other side”, Mr Takin said.

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