TEXACO RESUMES OIL PRODUCTION IN PARTITIONED NEUTRAL ZONE
TEXACO RESUMES OIL PRODUCTION IN PARTITIONED NEUTRAL ZONE MINA SAUD, Partitioned Neutral Zone, March 3 /PRNewswire/ -- Texaco
Inc. (NYSE: TX) marked the initial resumption of oil production at the company's war-ravaged facilities in the Partitioned Neutral Zone (PNZ) at a ceremony here today, exactly one year after the end of the Gulf War.
Initial production is flowing from wells damaged in the conflict and restored by an international team, which included Texaco employees, as well as many other Saudis, Kuwaitis and Americans. The celebration was hosted by Texaco President and Chief Executive Officer James W. Kinnear, who was joined by dignitaries from Saudi Arabia and Kuwait. Kinnear said that, "Our collective achievements during this ordeal are testament to the strength of our unique and special relationships forged with the Kingdom of Saudi Arabia and the State of Kuwait." Texaco's CEO declared that the restoration of the flow of oil in the PNZ within one year of the invasion is "another accomplishment to be proud of, and one that will set the stage for continued success in the decades ahead." Kinnear also noted that March 3 is a date which carries special meaning in Texaco's long and productive relationship with the Kingdom of Saudi Arabia. On March 3, 1938, oil was discovered by the drilling of Dammam Well Number 7 by the company that eventually became Arabian- American Oil Company (Aramco), a Texaco affiliate. "For over half a century, the Kingdom of Saudi Arabia and Texaco have enjoyed a relationship based on mutual esteem and common interests," Kinnear said. "These decades have witnessed many remarkable accomplishments from the early days of the Dammam Dome to the formidable success of Star Enterprise, the Texaco/Saudi downstream joint venture company based in the United States," Kinnear added. On behalf of Texaco, Kinnear expressed his admiration and appreciation to many dedicated individuals, including the company's employees and Saudi and Kuwaiti officials. "These individuals accomplished so much in such a remarkably short period of time, often at enormous personal risk," he said. Texaco Production To Reach 30,000 Barrels Per Day By Year-End Texaco estimates that its share of initial production will be approximately 20,000 barrels per day (BPD), rising to 30,000 BPD from operations in the Partitioned Neutral Zone by year-end. Before the invasion, Texaco's share of production from the PNZ was 67,500 BPD. Texaco, through a wholly owned subsidiary, holds a concession agreement with the Kingdom of Saudi Arabia, which encompasses the Kingdom's 50 percent undivided interest in the onshore Partitioned Neutral Zone. Producing activities are carried out by Joint Operations, an organization funded by and staffed on a 50-50 basis by Texaco and Kuwait Oil Company. The war resulted in the destruction of the company's refinery at Mina Saud. In addition, the company's main office and other facilities were damaged or destroyed. Despite the partial resumption of production, Kinnear also noted that much work remained. The company, with continued cooperation and support of the governments of Saudi Arabia and Kuwait, as well as its joint operation partner, the Kuwait Oil Company, looks forward to the challenge of restoring full po?ducing operations. FACT SHEET PARTITIONED NEUTRAL ZONE TEXACO OPERATIONS Texaco, through a wholly owned subsidiary, holds a concession agreement with the Kingdom of Saudi Arabia which encompasses the Kingdom's 50 percent undivided interest in the onshore Partitioned Neutral Zone (PNZ). The following provides a brief history of this area, as well as an overview of Texaco operations and the impact of the Gulf War on those operations. History. The Neutral Zone is an area shared by Saudi Arabia and Kuwait. The Neutral Zone was first established by agreement in 1922. In 1965, the area was partitioned with the Northern area administered by Kuwait and the southern area administered by Saudi Arabia. Each country has a 50 percent undivided interest in the mineral wealth of the entire PNZ. In 1949, the Pacific Western Corporation, later Getty Oil Company, was granted an oil concession from the Government of Saudi Arabia for its 50 percent share of the PNZ. Getty Oil Company was acquired by Texaco in 1984. The 50 percent interest of Kuwait is held by Kuwait Oil Company (KOC). Oil was first discovered in the PNZ in 1953. Three producing oil fields have been developed in the PNZ, Wafra, South Umm Gudair and South Fuwaris. The Wafra Field is the largest of these fields. Operations. PNZ producing activities are carried out by Joint Operations (JO), comprised of three departments overseen by a joint committee and which are funded by and staffed on a 50-50 basis by Texaco and KOC. Prior to the Gulf War, JO produced about 135,000 barrels per day (BPD) of oil (Texaco share 67,500 BPD). Oil from the three fields was centrally gathered at Wafra. Texaco's share of oil was transported via pipeline from Wafra to Mina Saud where it could be refined in a 100 percent Texaco-owned refinery. Products and crude were exported from facilities at Mina Saud. Texaco's main offices and camp are also located at Mina Saud. Impact of The Gulf War. In the wake of the Iraqi invasion of Kuwait, the company implemented an emergency plan to expedite evacuation of its employees and families to Saudi Arabia. Simultaneously, the company's employees shut down the oil fields and the refinery at Mina Saud. The company set up offices in the Saudi Arabian cities of Riyadh, Khobar and Khafji to provide its employees and families, most of whom are Saudi, with care and assistance and to carry on the administrative work of the company. When allied victory and the liberation of Kuwait became a reality, the company formed a Re-entry Team to plan for re-entry as soon as circumstances permitted. After receiving permission from the forces in the area, the re-entry team crossed the border into the company's area of operation. Arrangements for the protection of remaining company properties in Mina Saud and Wafra were implemented. This phase was difficult due to the scarcity of food and other supplies. Transportation and distribution of food, water and fuel were hazardous due to the mines and unexploded ordnance scattered in the area. Initially, military forces cleared critical areas of ordnance. Later, as the efforts expanded, Kuwait provided for the clearing of additional areas needed to resume oil production. Destruction Incurred in PNZ: The refinery at Mina Saud was destroyed. The company's main offices and employee possessions were looted and damaged. In addition, company transportation, commissary, recreation premises and hospital were also damaged and ransacked. In the Joint Operations area (Wafra, South Umm Gudair and South Fuwaris), the destruction was heavy. In the Wafra field, 293 well heads out of 355 were damaged by explosives. In many cases, this also resulted in damage to subsurface producing equipment. Many surface facilities, such as storage tanks and related equipment, were also damaged or destroyed. -0- 3/3/92 /NOTE TO EDITORS: Wire photos are available./ /CONTACT: Anita Larsen, 914-253-4155; Margaret C. Flesher, 914-253-6068; or James Swords, 914-253-4103, all of Texaco/ (TX) CO: Texaco Inc. ST: New York IN: OIL SU: SH -- NY023 -- 4359 03/03/92 09:32 EST
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|Date:||Mar 3, 1992|
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