Iran sparks fresh tension with neighbours over Durra gas field

The tension comes just after a statement published by the Saudi Press Agency, declared "ownership of natural resources in the submerged and divided area, including the entire Durra field, is the joint property of the Kingdom of Saudi Arabia and the State of Kuwait only, and they alone have full sovereign rights to exploit the resources in that area."

The source added that "the Kingdom renews its previous calls to the Iranian side to start negotiations to demarcate the eastern border of the submerged area divided between the Kingdom and Kuwait, which act as one negotiating party, vis-à-vis the Iranian side, in accordance with the provisions of international law."

The Deputy Prime Minister and Minister of Oil of Kuwait Saad Al-Barrak announced earlier his "categorical rejection of Iranian measures in the Durra field;" he pointed out that Kuwait and Riyadh are in agreement as one negotiating party and called for "the demarcation of international borders."

Importance of Durra field

The Durra field is located in the territorial waters shared between Kuwait and Saudi Arabia. In June 2006, the two countries announced their intention to develop the field and produce about 600 million ft3 of gas to be shared equally between them, but nothing has been done yet.

Iran claims that part of the field is located in its territorial waters and has been trying to carry out production operations without coordination with Kuwait and Saudi Arabia. This has led to tensions in relations.

The field was discovered in 1967 and its reserves are estimated at 11 trillion ft3 of natural gas, and there are estimates of oil reserves in the field estimated at 300 million barrels.

The development of this field will be beneficial to Saudi Arabia and Kuwait and will meet their respective countries' natural gas needs – where it can be used in the production of electricity and petrochemicals.

The field is also of great economic and political importance, as it is an anticipated reservoir for the production of a large amount of gas, whose prices have jumped since the outbreak of the Ukrainian war.

Kuwait is interested in starting production as soon as possible due to its need for natural gas, which currently is not enough to meet its domestic demand. The production of the field could also enable Kuwait to join the gas producers' club and boost its exports.

Longstanding demarcation dispute

The demarcation of the maritime border between Kuwait and Iran has been a longstanding dispute dating 60 years back.

Two separate exploration deals were reached: Iran appointed the Anglo-Persian Oil Company, which is longer in existence; on its part, Kuwait appointed Shell.

In 2012, Iran unilaterally declared its intention to develop the Durra field, which it calls the Arash offshore field. Kuwait responded to the remarks and demanded that Iran not take unilateral action before agreeing to demarcate the maritime border between the two countries.

The field lies within the common border between Saudi Arabia and Kuwait, which agreed to demarcate their maritime border in 2000. The two countries have insisted that Iran define the eastern border of the field before any drilling and exploration begins, but Iran has ignored their demands.

Kuwait's former foreign minister, Sheikh Mohammed Sabah Al-Salem Al-Sabah, held talks with the Iranians in 2006, but the talks failed to reach a consensus. Technical committees were formed between the two countries but were unable to find appropriate solutions.

Iranian intransigence

Iran has continued to be intransigent and unwilling to define maritime boundaries; it tries to control the production of the field, although technical studies have confirmed that the part near the Iranian border contains only 5% of the field's reserves.

Since December 2019, Kuwait and Saudi Arabia have stressed the importance of developing the field. In March 2022, the oil ministers of the two countries signed minutes of a meeting confirming the right of the two countries to exploit the Durra field and its natural resources in the divided area.

They reminded Iran of the importance of defining the eastern border of the so-called submerged divided zone. Iran objected to the minutes at the time, arguing that it is also entitled to the field and must be involved in development and operation plans.

Fresh escalation

Tensions escalated as Iran announced its intention to start drilling and exploration in the Durra gas field in preparation for installing drilling rigs and carrying out seismic studies.

A source at the National Iranian Oil Company said the company was in the process of drilling and would then begin production. 

Iran wants the demarcation of the border to be from the Iranian Kharg island to the Kuwaiti mainland, which is illogical. Kuwait demands that the demarcation be from Failaka Island to Kharg Island.

On his part, Iranian political analyst Imad Abshanas said that the dispute over the Durra field is due to Iran's insistence that the demarcation of the border is based on the continental shelf, which would mean that 40% of the field would be in Iran's territorial waters.

Kuwait insists that the demarcation is according to the land border, meaning that Iran would have no rights to the field at all.

Saudi Arabia and Kuwait base their claims to the field on proven geographic and geological realities, so it is highly unlikely they will capitulate to Iran's demands to be included in development and production plans, and subsequent sharing of generated revenues.

It is estimated that the field can produce 1bn ft3 of natural gas per day in addition to the production of 84,000 bpd of condensate. The revenue generated by the field would be equally divided between Saudi Arabia and Kuwait under the agreements adopted by the two countries.

Iran bid to buy time

In an interview with Sputnik, Mubarak Mohammed Al-Hajri, a Kuwaiti oil adviser, said: "The Iranian side, in light of the rapprochement with the Gulf countries, is trying to manoeuvre and procrastinate on the issue of the Durra field by refusing to sit at the negotiating table."

"It's known that Tehran is an expert negotiator. It always procrastinates and tries to buy time to tip the scales in their favour. In this case, it was to stop operations and stop development in the field." 

He stressed that "the field will be developed despite the Iranian side's protests, as there are agreements signed by the Iranian side with Kuwait and Saudi Arabia – the most important of which is the UN Convention on the demarcation of maritime borders, which makes it clear that the field of Durra is a Kuwaiti-Saudi border field, and the Iranian side has no share or rights to it."

Will the understanding between Saudi Arabia and Iran, adopted some time ago under China's sponsorship, help settle this dispute?

Read more: Will the Saudi-Iran deal reshuffle the regional security deck?

Will Iran accept international arbitration to demarcate the maritime border and end the festering dispute with Kuwait over the continental shelf?

Doubts remain about Iran's intentions and its willingness to adopt policies or relations based on international law and balanced relations with neighbouring countries.