Saudi Arabia okays Chevron oil concession extension
Saudi Arabia's cabinet has given final approval to an agreement that extends an oil concession held by US major Chevron in its Neutral Zone shared with Kuwait.
The concession is the only oil production deal that survived the Saudi nationalization of the oil industry in the 1970s. The 60-year deal was first granted in 1949 to a company founded by US industrialist Jean Paul Getty, helping make him the richest man in the United States.
The council of ministers has decided to approve the extension and amendment agreement between ... Saudi Arabia and Chevron Saudi Arabia at the Neutral Zone," Saudi state news agency SPA reported yesterday. SPA gave no further details on the extension or amendment.
In July, the Saudi cabinet authorized the oil minister to sign an extension.
Saudi Arabia and Kuwait share the estimated 550,000 barrels per day (bpd) output from the Neutral Zone. The zone is a region between Saudi Arabia and Kuwait that dates back to 1920s treaties to establish regional borders.
Chevron acquired the concession when it bought Texaco in 2001. Texaco had acquired it from Getty Oil in 1984.
Since the nationalization of the Saudi oil industry, the world's largest oil reserves have been off limits to international oil companies. Saudi Arabia holds around 264 billion barrels, over a fifth of the world's proven reserves, and is the world's top oil exporter. - Reuters