Khafji

Khafji Oil Field Profile

Location and Jurisdiction

The Khafji oil field is located in the Persian Gulf, within the neutral zone, also known as the divided zone, between Saudi Arabia and Kuwait. This area was established by the British-mediated Uqair Convention in December 1922.

Operators and Partnerships

The field is operated by Al-Khafji Joint Operations (KJO), a 50:50 joint venture between Aramco Gulf Operations Company (AGOC), a subsidiary of Saudi Aramco, and Kuwait Gulf Oil Company (KGOC), a wholly-owned subsidiary of Kuwait’s state-owned Kuwait Petroleum Corporation (KPC).

History

• The Khafji oil field was discovered in 1960 by the Japanese consortium Arabian Oil Company (AOC).
• Production began in 1961, and AOC continued to operate the field until the expiry of its concession agreement with Saudi Arabia in 2000 and with Kuwait in 2003. AGOC took over the Saudi Government’s share in 2000, and KGOC took over Kuwait’s share in January 2003.

Production and Reserves

• The Khafji field has a maximum sustainable production capacity of up to 300,000 barrels of oil per day (bpd) and produces 125 million standard cubic feet per day of associated gases, as well as 50 million standard cubic feet per day of gas lift.
• Following a production halt from 2014 to 2020 due to environmental concerns and political differences, production resumed, with the field expected to ramp up to 325,000 bpd by the end of 2020.

Field Development

• The field is developed with a total of 11 offshore platforms, including a central gathering platform. The majority of the gas produced is used for increasing reservoir pressure, and electric submersible pumps (ESPs) are used at some production wells for enhanced oil recovery.
• The oil is sent through a network of 28”, 36”, and 42” subsea pipelines to an onshore oil processing facility. Other onshore facilities include a 90MW gas-fired power plant, two gas-receiving stations, a water treatment plant, and a desalter unit.

Infrastructure and Projects

• Significant infrastructure projects include the installation of a 12” fuel gas submarine pipeline, onshore gas receiving facilities, and onshore gas lines to the Khafji separators area. There have also been projects to replace offshore electrical equipment, expand water treatment facilities, and construct new gas lift stations.
• Recent projects involve the renovation of loading facilities, the construction of new flow stations, and the installation of a 40KV power transmission system including a submarine cable and gas-insulated switchgear (GIS).

Contractors and Service Providers

• Various contractors have been involved in the development and maintenance of the field, including McDermott International, JGC Gulf International Company, Technip, Enppi, and Penspen. These companies have undertaken engineering, procurement, construction, and installation (EPCI) contracts, as well as other specific projects such as water treatment facilities and gas export systems.

Geology and Reservoir Characteristics

• The field is part of the Lower-Middle Cretaceous reservoirs, with the Wara formation being a key reservoir unit. The reservoirs are composed mainly of shales, siltstones, sandstones, and minor calcareous sediments. Stratigraphic trapping mechanisms play a critical role in entrapping hydrocarbons in this area.
• The use of 3D seismic data has been crucial in predicting reservoir properties such as porosity and lateral variations, helping in the planning of exploration and development wells.

Challenges and Recent Developments

• Production from the Khafji field and other fields in the neutral zone was halted from 2014 to 2020 due to environmental concerns and political differences between Saudi Arabia and Kuwait. However, following a memorandum of understanding signed in December 2019, production resumed.
• Chevron, which operates the Wafra field in the same neutral zone, is in the process of moving its headquarters and vital infrastructure to the Khafji operational area by January 2026, as part of an agreement to resume and enhance production in the zone.

Future Outlook

• The restoration of production capacity in the neutral zone, including the Khafji and Wafra fields, is expected to take several years. The target is to reach a production level of 500,000-600,000 bpd, although current production is around half of this figure. By the end of the next year, overall production could reach 300,000 bpd.

The Khafji oil field is a significant asset in the shared neutral zone between Saudi Arabia and Kuwait, with ongoing efforts to enhance production, improve infrastructure, and resolve historical operational challenges.