Chevron could restart oil production from the so-called partitioned zone between Saudi Arabia and Kuwait "relatively quickly", chief executive Michael Wirth told CNBC in an interview.
Chevron has an agreement with Saudi Arabia to produce oil from the fields in the partitioned zone on its behalf. However, a territorial dispute between the Kingdom and Kuwait put production of oil there on hold four years ago.
Previously, two fields in the partitioned zone-Khafji and Wafra-pumped half a million barrels daily. Operational differences and a worsening in bilateral relations led to the suspension of production in 2015. Last year, there was talk about restarting joint production after the United States called on its Gulf allies to increase production to keep rising oil prices from going too high.
At the time, sources told Reuters Saudi Arabia had wanted more control over the joint oil production operations in the zone and the Kuwaitis had been unwilling to accept that.
Now, following the Saturday attacks on a Saudi oil field and a processing plant with a capacity of 5 million bpd, talk about joint production in the PZ is once again on the table.
According to Chevron's Wirth, the attacks have highlighted the fact that there are real risks in the oil industry that could flare up at any time.
"Perhaps the market had grown a little bit comfortable with risks that we never became comfortable with," Wirth told CNBC's The Closing Bell. "These events demonstrate that those risks are real."
Saudi Arabia and Kuwait resumed discussions about the restart of joint production from Khafji and Wafra earlier this year, with then-Energy Minister Khalid al-Falih saying he expected all differences to be settled by the end of the year. The outage the attacks caused last week at the Khurais field and the Abqaiq processing plant could add urgency to the discussions.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
U.S. Power and NatGas Prices Plummet to Below Zero
Ukrainian Drones Hit Major Rosneft Refinery in Russia
First Niger Oil Bound for China Blocked in West Africa Border Row
Gas Prices Likely to Keep Falling Ahead of Peak Driving Season
Drone Attacks Take Khor Mor Gas Field Offline, Claims Lives