Khafji City is located on the Arabian Gulf, in the southern part of the ex-Neutral Zone and on the far northeastern tip of the Kingdom of Saudi Arabia
Al Khafji is located at latitude 28-26 N and longitude 48-30 E, slightly north of Ras Al-Khafji, 300 km north of Dammam City in the Eastern Province, 130 km South of Kuwait City and just 10 km from the Saudi Arabia / Kuwait border.
Al-Khafji city is affiliated to the Eastern Region's Amarah. The city started as a residential compound for the staff of the Arab-Japanese Oil Company which was offered the first concession right for oil exploration and drilling in the neutral zone between the Kingdom of Saudi Arabia and the State of Kuwait. The city was located in the neutral zone, the concession area between Saudi Arabia and Kuwait. Later the city became fully administered by the Kingdom of Saudi Arabia, and called Al-Khafji Province of The Eastern Region.
A number of factors affect the climate in the Al-Khafji area, the most important being the meteorological and geographic locations. Al Khafji’s climate is considered to be an arid region climate, with a total average annual rainfall of only 105 mm. However, the quantity of annual rainfall substantially varies from one year to another as some years witness precipitation of more than 200 mm, while in others only a few mm. During 2010, the total rainfall for the year was 23.50 mm, comparatively low as compared to rainfall during the year 2009. Rain fell during the months of January through May and in December; there was no rainfall between the period June and November.
In Spring the average temperature is in the range of 21°C, with relative humidity about 50%. In Summer the temperature averages around 37°C, while relative humidity is above 50%. Autumn sees average temperatures around 29°C, while relative humidity is about 50%.
Oil industry in Khafji started in mid 1956 when Mr. Yamashita Taro and a group of Japanese entrepreneurs established the Japan Petroleum Trading Company Ltd. In February 1957, Mr. Yamashita made his first visit to the Kingdom of Saudi Arabia in order to obtain an oil concession, where he held preliminary negotiations with the then Saudi Government top officials.
The Saudi government positively responded and promised to consider the concession application. Following that promise, Mr. Yamashita established the Arabian Oil Company Limited [AOC).
Mr. Yamashita was entrusted with power to conduct negotiations on the owners' behalf, K.S.A. at that time sent a delegate to Kuwait to ask for a Saudi-Kuwaiti joint move over the concession agreement and over the Divided Neutral Zone between the two countries.
the negotiations concluded by signing the concession agreement between the Saudi Government and the Japan Petroleum Trading Company Ltd.
the operating company "Arabian Oil Company Ltd." was established; consequently all rights and obligations under the said concession were assigned to it from the mother -Japan Petroleum Trading Company". Under the said agreement, the K.S.A. government provided the company with an exclusive petroleum exploration and prospecting license for a period not exceeding two years and exploration concession for 40 years as of the date, of the end of the former period.
On July 5th, 1958, Kuwait Government granted AOC the concession over its one half interest of the neutral divided zone for 44 years including the period of exploration and geological survey.
Following the conclusion of the two concession agreements in the years 1957 & 1958, AOC commenced its activities at Khor Al-Mufattah, 33 km northward Khafji.
as a result of the discovery of oil in commercial quantities, AOC had decided to consider its permanent operations base at Al-Khafji and constructed all the onshore supporting facilities of production, shipping, offices, housing and other facilities required for the company developing operations.