Khobar, Asharq Al-Awsat—Oil regulators in Saudi Arabia and Kuwait decided on Thursday to halt production at a jointly-run oilfield citing environmental concerns, Asharq Al-Awsat has learnt.

Operations at the Khafji oilfield are being shut down by the authorities of the two Gulf Cooperation Council member states due to non-compliance of emissions standards, official sources speaking on the condition of anonymity told Asharq Al-Awsat.

The offshore oil venture has an estimated capacity of 300,000 barrels per day (bpd) and operates in a neutral zone located between Saudi Arabia and Kuwait. The oil field is run by Khafji Joint Operations, a company jointly owned by state-run Saudi Aramco and Kuwait Oil Co.

Khafji Joint Operations took the decision to shut down oil production at Khafji oilfield after a long-running debate between Saudi Arabia and Kuwait failed to reach a solution, according to an internal memo signed by company chairman Abdullah Helal.

The internal memo, which Asharq Al-Awsat obtained a copy of, suggested that oil production will resume once Khafji oilfield is able to meet the environmental standards enforced by the Saudi Presidency of Meteorology and Environment.

Khafji is the second joint energy project to be halted by Saudi Arabia and Kuwait after plans for the establishment of the Dorra gas field were shelved in 2013.