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DUBAI (Dow Jones Newswires), September 9, 2008
Chevron Corp. will continue to operate in the partitioned neutral zone shared between Saudi Arabia and Kuwait after the extension of its concession was approved by Saudi Arabia's cabinet, the official Saudi SPA news agency reported Tuesday.
"The cabinet decided to approve the extension and amendment of the agreement between Saudi Arabia and Chevron Saudi Arabia at the partitioned zone," SPA reported.
The news agency didn't provide further details on what amendments would be made or by how many years the agreement would be extended for.
Chevron, the U.S.' second biggest oil company, has been negotiating an extension of the concession, which covers Saudi Arabia's share of the PNZ, with the kingdom's authorities beyond its expiration in 2009.
The 60-year concession was awarded in 1949 to the U.S.' Getty Oil Co., which in 1984 was taken over by Texaco, the oil major that later merged with Chevron.
Chevron, is currently working on a steam flood project that is aimed at boosting output of heavy crude from the onshore area of the zone, which presently produces an estimated 550,000 barrels a day between Kuwait and Saudi Arabia.
Saudi Arabia, which is producing about 9.5 million barrels a day is the world's largest oil exporter while the U.S. is the world's biggest oil consumer.
Chevron's Vice Chairman, Peter Robertson, in February said the Company may consider getting involved in new downstream investments once heavy crude oil production in the PNZ picks up further.
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