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 overutilising 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 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.