Unlocking reserves: new oil found in Saudi-Kuwait Zone

In a significant development for the oil and gas industry, Saudi Arabia and Kuwait have announced the discovery of a new onshore oil well in the long-shared Neutral Zone, a region that often flies under the radar but holds massive strategic value.

The well, named Wara-Burgan-1, is located about 5 kilometers north of the Wafra field and was discovered by Wafra Joint Operations (WJO), a partnership between Chevron Saudi Arabia and Kuwait Gulf Oil Company (KGOC),  according to Argus. 

Initial estimates place the well’s production capacity at over 500 barrels per day (b/d) with an API gravity between 26° and 27°, indicating a medium-grade crude.

This is the first new discovery in the Neutral Zone since production resumed in 2020, after a near five-year shutdown caused by disagreements over operational management between the two countries. 

Although the Wafra (onshore) and Khafji (offshore) fields have been back online for a few years, they have been operating below full capacity, primarily due to commitments made under OPEC+ production agreements.

Currently, combined output from the Neutral Zone is slightly under 500,000 b/d, but this new discovery is part of a larger strategy to raise production above 600,000 b/d in the coming years. 

The joint announcement also signals improved diplomatic and operational alignment between Kuwait and Saudi Arabia — a crucial factor for stability and growth in the region’s upstream sector.

Unlocking reserves: new oil found in Saudi-Kuwait Zone

What Is the Neutral Zone?

The Neutral Zone is a divided area of land and sea located between southern Kuwait and northeastern Saudi Arabia, covering about 5,770 square kilometers (2,230 square miles). 

It was established in 1922 when the two nations couldn’t agree on a precise border, and thus agreed to share the territory,  including any oil resources discovered within it.

What makes the Neutral Zone unique is that all oil production is split 50/50 between both countries. 

Despite the geopolitical sensitivity of such arrangements, Saudi Arabia and Kuwait have maintained joint exploration and development efforts through companies like WJO and Khafji Joint Operations (KJO).

The Wafra field represents the onshore portion of the zone, while Khafji covers offshore operations. 

Combined, these fields hold significant reserves, and renewed investment suggests a reinvigoration of joint energy ambitions.

Why it matters

This discovery is more than just an increase in daily output — it’s a signal to global markets that the Neutral Zone is once again a serious contributor to oil supply, backed by political will and technical collaboration. 

With both countries seeking to expand capacity while balancing OPEC+ quotas, the Neutral Zone may become a key lever in managing regional production flexibility.

For observers of Middle East energy strategy, this is a development worth watching closely.