Chevron is reportedly planning to cut up to 1,000 jobs in the partitioned zone between Kuwait and Saudi Arabia as a land use dispute between the two countries heats up.
Sources familiar with the matter told the Wall Street Journal that the layoffs are tied to an ongoing dispute between Kuwait and Saudi Arabia that has halted work at the area’s oil fields for months.
According to the Journal, Kuwait wants to construct a refinery on land currently being used by Chevron for its offices.
The land was granted to Chevron when it won a 30 year concession renewal from Saudi Arabia in 2009.
Saudi Arabian Chevron holds the concession for Saudi Arabia’s 50 percent stake in the onshore portion of the partitioned zone, where the company conducts exploration and production activities on behalf of that country.
Kuwait officials claim they didn’t know the concession renewal included the disputed land and the country has asked that Chevron move its offices.
Tensions between the two countries escalated earlier this year after Saudi Arabian Chevron began shutting down oil fields being jointly developed in the partitioned zone by Saudi Arabia and Kuwait, Bloomberg said.
That move came several months after Saudi Arabia halted production at an offshore partitioned zone oilfield without consulting Kuwait, citing environmental concerns.
A Chevron spokesperson told the Wall Street Journal the dispute has made it difficult for Chevron to secure work permits and materials, forcing Saudi Arabian Chevron and Kuwait Gulf Oil Co. to halt production in the neutral zone.
Chevron has not disclosed if the partitioned zone layoffs are part of a plan to cut between 6,000 to 7,000 jobs announced in October or any other details about the move.
Petroleum and mineral resources in the partitioned zone are shared jointly by the governments of Saudi Arabia and Kuwait, according to Chevron.