Chevron Corporation announced the extension and amendment of its agreement with the Kingdom of Saudi Arabia. This agreement grants Chevron the right to operate on behalf of the Saudi government for its 50 percent undivided interest in the petroleum resources of the onshore area of the Partitioned Neutral Zone (PNZ) between the Kingdom and the State of Kuwait.
The agreement extends the existing arrangement for 30 years, through February 19, 2039. Under the agreement, Saudi Arabian Chevron (SAC), a subsidiary of Chevron, will continue to explore for and produce crude oil and natural gas on behalf of the Kingdom in the onshore PNZ. The field operations are managed jointly by SAC and Kuwait Gulf Oil Company.
"We are extremely pleased and honored that Chevron will continue to partner with the Kingdom of Saudi Arabia in developing the petroleum resources of the Partitioned Neutral Zone and the Kingdom," said Chevron Chairman and Chief Executive Officer David J. O'Reilly. "Chevron and predecessor companies have worked closely with Saudi Arabia for more than 75 years and have played a significant role in the development of its petroleum industry. We are committed to helping develop the potential of the Partitioned Neutral Zone fully and responsibly.
"The extension of the agreement will ensure that important supplies of much-needed energy continue to reach world markets," said O'Reilly. "The benefits of the extension will be realized both within the region and globally."
"We see tremendous opportunities in the PNZ," said John Watson, executive vice president, Strategy and Development, Chevron. "With the extension of this agreement, our partnership expects to apply innovative technology to grow the recoverable reserves, create jobs and provide other benefits for the region."
"In particular, we are very excited about the possibility of making full-field development of steamflood technology a reality in the PNZ," said Watson. "We are making solid progress in our series of projects to validate the feasibility of utilizing steamfloods to produce the extra heavy oil of the Eocene carbonate reservoirs. If successful, this would mark the first time that this enhanced oil recovery technology has been employed to produce commercial quantities of oil from a carbonate reservoir anywhere in the world."
Saudi Arabian Chevron and the Kuwait Gulf Oil Company, operator for Kuwait's equal 50 percent undivided interest in the petroleum resources of the onshore PNZ, jointly operate four fields in the area - Wafra, South Umm Gudair, South Fuwaris and Humma - that produce mainly heavy crude from 10 reservoirs. In 2004, the 3 billionth barrel of oil was produced in the onshore PNZ. Operations in the PNZ are managed by the Saudi Arabia/Partitioned Neutral Zone Strategic Business Unit of the Chevron Europe, Eurasia and Middle East Exploration and Production Co., one of four Chevron upstream operating companies.