Saudi Arabia and Kuwait Hold Exclusive Rights to the Dorra Gas Field, Says Saudi Foreign Ministry

By Abdelrahman Ellithy On Jul 4, 2023

In response to recent discussions surrounding the Dorra gas field, an informed source from the Saudi Foreign Ministry has clarified that the natural resources in the submerged divided region, including the entirety of the Dorra field, are jointly owned by the Kingdom of Saudi Arabia and the State of Kuwait, the source emphasized that these two nations alone possess the sovereign rights to exploit the resources in this area.

The Saudi Foreign Ministry has reiterated its previous calls to the Iranian side to commence negotiations to demarcate the eastern boundary of the submerged divided region between Saudi Arabia and Kuwait, the negotiations are proposed to be held as a single negotiating party against the Iranian side, in accordance with the provisions of international law.

Historical Key Points:

The Dorra gas field, also known as the Arash field, is an offshore natural gas field located in the neutral zone between Iran, Kuwait, and Saudi Arabia. It was discovered in 1967 and began production in 2013. The total proven reserves of the Arash gas field are around 20 trillion cubic feet, and production is slated to be around 1.5 billion cubic feet/day.
In December 2022, Saudi Aramco and Kuwait Gulf Oil Company signed a Memorandum of Understanding to develop the Durra field jointly. The development aims at producing 1 billion cubic feet of gas and 84,000 barrels of LNG per day.
The Dorra Gas Field is located in shallow waters offshore in the northern Arabian Gulf. With the growing gas demand in these countries, any production will be absorbed into the domestic network and the impact of production on the global gas and liquefied natural gas (LNG) market will be insignificant. However, the development of the field, if it occurs, may serve as a bellwether for regional relations.
The Dorra Field was discovered in the mid-1960s at a time when maritime boundaries were poorly defined, and gas was not considered a strategic asset. Kuwait and Iran awarded overlapping offshore concessions due to the undefined maritime boundary, while Kuwait and Saudi Arabia developed a neutral zone, known as the Partitioned Neutral Zone (PNZ), covering the on- and offshore border area, wherein all hydrocarbon fields would be developed jointly by their national oil companies.
In late 2019, both countries agreed to resume production from PNZ fields, which served as an indicator that wider talks could resume on the Dorra Field. In late 2020, both countries announced they would appoint a single technical consultant to review and assess the field development plan, production forecast, storage options, and development costs and determine the gas share per country.
The wild card is Iran, which claims part of the field. While the maritime boundaries have yet to be defined and agreed by all parties, Kuwait and Saudi Arabia have reached a mutual understanding with the delineation of the PNZ. The international border or eastern boundary of the zone, delineating Kuwait and Iran and Saudi Arabia and Iran, has not been agreed. Both Kuwait and Saudi Arabia will agree that Iran is overreaching.
Resource estimates vary wildly from 60 trillion cubic feet (tcf) in place to a more reasonable 10-13 tcf and 300 million barrels of oil in place. Production estimates vary too, ranging from 800 million cubic feet per day to 1.0 bcfd and 84,000 barrels per day.
The impact on the global gas and LNG market will be inconsequential given that any production will be absorbed into the domestic power and energy sector of any of the three countries. As a result, the development of Dorra/Arash is more of a bellwether for regional relations than it is about the global LNG market.