Iran rejects Saudi-Kuwait gas field deal

By Syed Zafar Mehdi

TEHRAN, Iran (AA) – Iran has dismissed an agreement between Gulf neighbors Saudi Arabia and Kuwait to develop an offshore gas field as "illegal", saying it must be included as one of the parties.

In a statement on Saturday, Foreign Ministry spokesman Saeed Khatibzadeh said the Durra/Arash gas field — located in the interlocking marine region between Kuwait and Iran — is a joint offshore gas field shared by the three Gulf countries.

Taking strong exception to the agreement signed between Saudi Arabia and Kuwait on Monday, the spokesman said Iran reserves the right to develop and operate the field in coordination with other two parties.

The agreement was inked on Monday by Kuwaiti Oil Minister Mohammad Al Fares and his Saudi counterpart Abdulaziz bin Salman al Saud, who announced that the project will be jointly developed by Saudi-based Aramco Gulf Operations Company and Kuwait Gulf Oil Company, with both countries sharing the output equally.

The gas field is expected to produce 1 billion cubic feet of gas and 84,000 barrels of condensate per day, according to reports.

The gas field, developed in the 1960s and yet to be demarcated between Iran and Kuwait, contains large gas reserves, with some estimates putting it at 11 trillion cubic feet of natural gas and 300 million barrels of oil.

Khatibzadeh said any action in developing and operating the gas field must take place "in coordination and cooperation of all three countries."

"The Islamic Republic of Iran, as it has affirmed many times before, is ready to enter into negotiations with the neighboring countries, Kuwait and Saudi Arabia, on how to exploit this common field, within the framework of the results of previous negotiations with Kuwait," the spokesman said.

He also expressed Iran's readiness to continue bilateral talks with Kuwait and begin trilateral talks with both Kuwait and Saudi Arabia in "defining a joint point."

Ali Ahmadi, a Tehran-based strategic affairs and MENA expert, said the issue is that part of the Durra/Arash gas field extends into waters "whose boundaries have not clearly been defined by Iran and Kuwait."

"There have been some talks on these issues in the past. Iran believes that any Saudi-Kuwaiti agreement would, therefore, be exploiting gas that is partially under Iranian waters and rightfully Iran's in part," he told Anadolu Agency.

He said these issues need to be "more clearly defined by discussions" between the two sides, which hasn't happened yet.

"Ideally, the three countries would work out an agreement and share the proceeds to the benefit of all involved but regional tensions and US sanctions complicate this task," Ahmadi added.

The dispute between Iran and Kuwait over the exploration of the gas field dates back to the same time it was discovered, according to Mohammad Obouyi, a Persian Gulf affairs analyst, and it has again come to light now in the wake of the Saudi-Kuwait agreement.

"The gas field is of huge significance for Iran, both financially and strategically, as it lies in a sensitive border region and contains large reserves of gas," he said. "Objections are thus legitimate."