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Saudi Arabia and Kuwait announce Neutral Zone oil find

28 May 2025

Saudi Arabia and Kuwait have announced a new oil discovery in the Neutral Zone, also known as the Divided Zone or Partitioned Zone, shared between the two countries.

The oil was discovered in the North Wafra Wara-Burgan field, located five kilometres north of the onshore Wafra field, within Wafra Joint Operations – a 50:50 joint venture of state-owned Kuwait Petroleum Corporation (KPC) subsidiary Kuwait Gulf Oil Company (KGOC) and US energy company Chevron, which manages the Neutral Zone onshore concession on behalf of Saudi Arabia.

Crude oil flowed from the Wara reservoir in the North Wafra Wara-Burgan-1 well at a rate exceeding 500 barrels a day (b/d), with an API gravity of 26 to 27 degrees. 

“The discovery is regarded as highly significant, given its positive impact on both countries’ standing as reliable global energy suppliers and their capabilities in the exploration and production sector,” the Saudi Press Agency stated.

The Neutral Zone consists of the two main fields of Khafji and Wafra, along with other smaller fields, which collectively have an oil output potential of 500,000 to 600,000 b/d.

While the Wafra field is operated by Wafra Joint Operations, the Khafji field, situated offshore, is operated by Al-Khafji Joint Operations (KJO), which is jointly owned by Saudi Aramco subsidiary Aramco Gulf Operations Company (AGOC) and KGOC.

The Wafra field resumed operations in February 2020, while the Khafji field partially resumed production in March of that year, following a five-year stoppage due to disputes between Riyadh and Kuwait. The two countries reached an agreement in December 2019.

The discovery of the North Wafra Wara-Burgan field marks the first hydrocarbon find since oil production activities restarted in 2020.

Dorra gas field

The Saudi-Kuwait Neutral Zone also consists of the Dorra gas field situated in the waters of the Gulf. The Dorra field is estimated to hold 20 trillion cubic metres of gas and 310 million barrels of oil.

Kuwait and Saudi Arabia have been working together to develop the offshore field since it was discovered in 1965. The two sides expect to produce about 1 billion cubic feet a day of gas from the asset and have agreed to split the gas output equally.

A geopolitical tussle over ownership of the asset has hampered progress. Iran, which calls the field Arash, claims that it partially extends into its territory and that Tehran should be a stakeholder in any development project. 

Kuwait and Saudi Arabia maintain that the Dorra field lies entirely in the waters of their shared territory, and that Iran has no legal basis for its claim. 

In February 2024, Kuwait and Saudi Arabia reiterated their claim over the Dorra field in a joint statement issued during an official meeting between Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah and Saudi Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud in Riyadh.

In parallel, KJO has been progressing with a large-scale project to produce and process gas from the Dorra field on behalf of the two sides.

In September 2023, MEED reported that Aramco and KPC had selected France’s Technip Energies to carry out front-end engineering and design (feed) and pre-feed work on the Dorra offshore field development project. The original feed work for a project to develop the field was performed more than a decade ago. However, due to changes in technology, the engineering design needed to be updated before the project could reach a final investment decision.

It is understood that KJO then issued tenders for the engineering, procurement and construction (EPC) works on the Dorra gas field development project in August last year.

KJO has divided the scope of work on the Dorra gas field development project, which is estimated to be valued at up to $10bn, into four EPC packages – three offshore and one onshore.

Contractors are preparing to submit bids for the four EPC packages by their current deadlines in June.

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Indrajit Sen

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