Kuwait and Iraq are close to an agreement over oilfields in a border area at the small Gulf Arab state, a Kuwaiti newspaper said on Thursday.
Daily al-Qabas said in an unsourced report that the two countries were about to reach a "mechanism" to divide up the Rumaila/Ratqa fields following talks between Iraqi and Kuwaiti officials this week in Kuwait.
It gave no details, and Kuwaiti oil officials could not be reached for comment.
The Ratqa field, which is a southern extension of Iraq's giant Rumaila field, stirs up memories of the conflict.
In the weeks before the occupation, Baghdad accused Kuwait of stealing billions of dollars worth of its Rumaila oil through horizontal drilling. Kuwait denied the charge.
After the Gulf War, United Nations demarcation put all Ratqa wells within Kuwaiti territory.
The border between the two countries has been fixed but diplomats say Iraq and Kuwait are still in talks to agree on the location of border posts as some farms and oil facilities are located close to the border.
"Everything is very tight up there. Oil facilities are located until very close to the border. Some piers at the (Iraqi oil port of) Umm Qasr are effectively on the Kuwaiti side," a diplomat said.
"Kuwait has offered to pay compensation to relocate some farms in the border area," he added.
According to the U.S. energy department, the Ratqa field, which is run by state-owned Kuwait Oil Co, has a production of 45,000 barrel per day.
The Rumaila fields, operated by Iraq's South Oil Co, has been producing 1.5 million to 1.9 million bpd, according to the U.S. energy department's website.
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