Kuwait and Iraq have agreed “in principle” on a deal to regulate production from the border oilfields that once caused conflict between the two Arab states, the Kuwaiti oil minister said Wednesday. The deal follows technical negotiations between the two nations and “we have agreed in principle. Kuwait signed the deal and they (Iraq) will be signing it this or next week,” Sheikh Ahmad Abdullah Al-Sabah told reporters. The deal calls for “a unified international company to drill for oil,” on the joint border fields, the minister said. It also allows international oil companies “to come and agree with both countries to drill at the same time for the same field,” he said. “It's to avoid future claims that one of these countries is overutilizing this kind of joint fields,” said Sheikh Ahmad. A number of oilfields lie on the border between the two Arab countries, including Iraq's giant Rumaila which extends into Kuwait where it is known as Ritqa. There are other such fields in Zubair and Safwan. Most of Iraq's current production of 2.5 million barrels per day comes from Rumaila, which has a daily production of around 1.5 million bpd, while Kuwait's production from Ritqa is just under 50,000 bpd. The two sides have in the past traded accusations of oil theft, although Kuwaiti officials have repeatedly denied Iraqi charges that the emirate has been producing illegally from border fields. Iraq's deposed and executed president Saddam Hussein accused the emirate of stealing oil from Rumaila when his forces invaded and occupied Kuwait in August 1990, before their ouster seven months later by a US-led coalition. The two Arab nations together control about a quarter of the world's proven crude oil reserves, with Iraq estimated to be sitting on 15 percent and Kuwait around 10 percent. Moreover, Sheikh Ahmad Abdullah Al-Sabah said on Wednesday he was “satisfied” with the current world price of crude and predicted it would rise in the fourth quarter. “We do appreciate what's happening in the international market and the international economy, and we are satisfied with the current oil price,” the minister told reporters outside parliament. Sheikh Ahmad said he expected crude prices to “pick up” in the fourth quarter. World prices languished under $72 a barrel on Wednesday, with the market hit by concerns about weak demand ahead of the release of key energy data from top consumer the United States. The price of US crude oil fell close to a seven-week low on Wednesday, but staged a partial recovery amid cautious trading ahead of closely watched oil inventory figures from the US government. Oil was put under downward pressure after US durable goods data rose by less than expected. But traders were reluctant to push the oil price down too far ahead of the Energy Information Administration stocks numbers, due at 1430 GMT. Analysts said Tuesday's 1.8 million barrel drop in US crude inventories reported by the American Petroleum Institute could be confirmed by the EIA. Traders also said oil might have been oversold after a sharp fall in the price since early August. US crude for October delivery was down 18 cents on the day to $71.45 a barrel by 1312 GMT, after trading as low as $71.10. October ICE Brent fell 10 cents to $72.28 a barrel.
