Amidst Dispute Over the Durra Oil Field, Could Saudi–Iranian Relations Deteriorate Again?

In a move that stirred displeasure from Kuwait and Saudi Arabia, Iran declared its full readiness to start drilling at the Durra gas field for natural gas. Both Gulf states rejected this announcement, affirming their exclusive right to exploit their respective resources and expressing their willingness to negotiate with Tehran as a single party.

On July 4, 2023, the President of the National Iranian Oil Company (a government entity), Mohsen Khojasteh-Mehr, stated, "We are fully prepared to start drilling at the Arash gas field [Durra gas field], and we have allocated substantial resources to execute its development plan through the company's management board. We will initiate drilling when conditions are prepared."

Iran's declaration of its intention to exploit the Durra field raised several questions, particularly regarding the motivation behind Tehran's presentation of this disputed issue just one month after reopening its embassy in Riyadh as part of a settlement between the two countries in March 2023. How might this development affect the ongoing rapprochement?

 

Internationalization of the Case

The internationalization of the issue was addressed by Iraqi political analyst Imad al-Jubouri, who said, "When Iran raises the prospect of exploration at the Durra gas field, claiming a 40% stake based on an old British scheme to divide water boundaries, especially as the investing company in this exploration is British, it could potentially transfer the matter to international law."

Al-Jubouri, a Gulf affairs specialist residing in London, added, "The location of the field falls within Arab waters, but Iran encroaches upon Arab territories, from Ahvaz to the Emirati islands seized (Greater and Lesser Tunbs, Abu Musa), and it encroaches upon the Shatt al-Arab in southern Iraq and other areas."

Regarding the timing of Iran's proposal, al-Jubouri believed it to be a "pulse check" to measure the Gulf's reaction, especially from the Saudi side. He pointed out that some leaks indicated that the Saudi naval forces were mobilizing and encircling the Durra field to prevent an aggressive Iranian takeover.

While he ruled out the possibility of armed confrontation as Iran still values its Saudi lifeline and does not want to jeopardize it at this stage after the recent resumption of relations, he asserted that this didn't prevent Tehran from occasionally baring its fangs and ambitions.

The writer emphasized the necessity for Gulf regimes not to be overly optimistic about Iran and to recognize that political and economic interests would not alter Iran's expansionist Persian ideology in Arab countries.

In March 2023, China sponsored an agreement between the Kingdom of Saudi Arabia and Iran, leading to the resumption of relations that had been suspended for seven years due to the burning of the Saudi embassy in Tehran following the execution of Saudi Shiite cleric Nimr al-Nimr on terrorism charges.

On June 6, 2023, Iran reopened its embassy in Riyadh with the presence of Deputy Foreign Minister for Consular Affairs Ali Reza Bigdeli, who deemed the move a "new era" in the relations between the two regional powers.

Subsequently, on June 17, 2023, Saudi Foreign Minister Faisal bin Farhan visited Tehran, where he met with his Iranian counterpart, Amir-Abdollahian, and President Ebrahim Raisi.

 

Iranian Objective

On the other hand, Iranian political analyst Emad Abshenass stated that the maritime dispute over the Durra field is long-standing, dating back to its discovery in 1960. The field is shared between Iran, Saudi Arabia, and Kuwait.

Russian news agency Sputnik quoted Abshenass on July 4, 2023, saying that the disagreement over this field arises from Iran's insistence on delimiting the borders based on the continental shelf, where 40% of this field falls within Iran's territorial waters.

Kuwait insists on delimitation according to the land borders, which would mean that Iran is entirely outside the field. Abshenass affirmed that this dispute has halted all gas exploration activities in this field for many years until the border issue is resolved and delineated between the two countries.

Recently, Kuwait and Saudi Arabia reached an agreement to extract gas from the field, which has angered the Iranians. They have expressed a desire to benefit from exploiting the gas in their territorial waters, prompting Kuwait to call for negotiations, according to the Iranian expert.

Abshenass ruled out this dispute having an impact on the process of Iranian–Gulf and Arab rapprochement, as it is an old dispute. At times, there have been attempts by the United States to incite the countries against each other, but Kuwait offered to restore communication and coordination to delimit the borders.

According to the Iranian expert, Tehran seeks negotiations with Kuwait and Saudi Arabia over the Durra field to reach a solution to the existing dispute. Iran does not wish to engage in conflict, war, military confrontation, or political disputes with the Gulf countries.

In late May 2023, Iran initiated negotiations with both countries. Iranian Oil Minister Javad Owji stated on the sidelines of a Cabinet meeting discussing the sale of Iranian oil in the global markets that the Ministry of Foreign Affairs is consulting with Kuwait and Saudi Arabia to resolve the disputes related to the field, as reported by the Iranian news agency, IRNA.

Two days prior to his Iranian counterpart's statement, Saudi Energy Minister Abdulaziz bin Salman announced that his country had reached an agreement with Kuwait to address the crisis concerning the Durra gas field, which lies in the demarcated area shared with Iran.

Both countries expressed their determination to develop the field to capitalize on its substantial potential.

 

Call for Negotiations

In response to the Gulf reaction, the Saudi Ministry of Foreign Affairs issued a statement asserting that the ownership of natural resources in the submerged area, including the entire Durra field, is jointly owned by the Kingdom and the State of Kuwait only.

A source within the Ministry of Foreign Affairs, as reported by the official Saudi Press Agency (SPA) on July 5, 2023, further stated that Saudi Arabia and Kuwait alone have full sovereign rights to exploit the resources in that region.

The source continued that Saudi Arabia renewed its previous calls to the Iranian side to commence negotiations to delimit the eastern boundary of the submerged area between the kingdom and Kuwait as a single negotiating party, in accordance with international law provisions.

This statement came one day after a statement from the Kuwaiti Ministry of Foreign Affairs, affirming that "the maritime area where the Durra gas field is located falls within Kuwait's maritime territories, and the natural resources there are shared" with Saudi Arabia.

The official Kuwait News Agency (KUNA) quoted a source within the Ministry of Foreign Affairs saying in the statement that the maritime area in which the Durra field is situated lies within Kuwait's maritime territories and the natural resources are shared with the Kingdom of Saudi Arabia. Both countries have exclusive rights to the natural resources in the Durra field.

The source added that Kuwait renews its call to the Iranian side to initiate negotiations to demarcate the maritime borders between Kuwait and Saudi Arabia as a single negotiating party in exchange for the Iranian side.

In his statement on July 12, the Iranian Oil Minister, Javad Owji, announced that the Ministry of Foreign Affairs in Iran will address the issue of the gas field known as Durra or Arash in Iran, according to Reuters citing the Iranian news agency Tasnim.

 

Long-standing Dispute

The issue of the Durra field did not emerge with Iran's announcement: the disputes came to the forefront in March 2022, just days after Saudi Arabia and Kuwait signed an agreement to develop the field. Iran rejected the agreement, objecting to the investment in this hydrocarbon-rich area without its involvement.

The Kuwaiti Petroleum Corporation (a government entity) announced on March 21, 2022, that the development project of the Durra field would lead to the production of one billion standard cubic feet of natural gas and 84,000 barrels of condensate per day. The production was intended to be divided equally between the two countries.

As a result, the Deputy Minister of Petroleum for International and Commercial Affairs, Ahmad Asadzadeh, declared that the Ministry of Oil had taken the necessary arrangements and studies to develop and operate the Arash (Durra) field in the Gulf, as reported by Fars News Agency on March 27, 2022.

Asadzadeh stated that the delay in operating this shared field was due to the decision to demarcate the borders with Kuwait, but there was no reason for delay if the other side developed the field unilaterally, disregarding the previous negotiations.

He added: "We believe that the exploitation of shared fields should be done comprehensively, leading to the enhancement of economic relations between the two countries." He explained that even in cases where the border demarcation has not been carried out, the field can be developed in an integrated manner using internationally experienced models, and the Ministry of Oil is ready to negotiate on this matter.

On April 13, 2022, the Saudi Ministry of Foreign Affairs said in a statement that Riyadh and Kuwait affirm their right to exploit the natural resources in this area and continue to work towards implementing the agreement signed between them on March 21, 2022.

According to SPA, the Saudi Ministry of Foreign Affairs confirmed that Riyadh and Kuwait renewed their invitation to the Islamic Republic of Iran to hold negotiations to determine the eastern boundary of the submerged divided area as a single negotiating party.

In contrast, IRNA reported in April 2022 that the former Deputy Minister of Petroleum for International Affairs in Iran, Seyed Mehdi Hosseini, emphasized the necessity of participation and cooperation between Iran, Kuwait, and Saudi Arabia in investing in the shared gas field.

He stated that his country is ready to begin drilling in the field if these two countries do not cooperate in demarcating the border.

The gas field was discovered in the mid-1960s when maritime boundaries were not well-defined, and gas was not considered a strategic asset at that time.

The field contains a significant reserve of gas, with an estimated recoverable gas reserve of about 200 billion cubic meters, in addition to over 300 million barrels of oil.

On June 7, 2006, Kuwait and Saudi Arabia agreed to develop the Durra gas field to achieve a production level of about 600 million cubic feet of gas within approximately four years, to be equally shared between the two countries. However, nothing materialized.

In 2012, the Al-Khafji Joint Operations, a joint project between Aramco Gulf Operations and the Kuwait Gulf Oil Company, worked on granting development and production rights to the international oil company Shell.