Kuwait is working to raise oil production from alternative oilfields to compensate for the loss of 250,000 barrels per day in a row with Saudi Arabia, an official said Monday.

"Kuwait Oil Company is trying its best to concentrate on high production fields... to dig more wells in a bid to compensate" for the loss in neutral zone production, head of marketing at Kuwait Petroleum Corp. Jamal al-Loughani told reporters.

Kuwait lost the production after a dispute with neighbouring Saudi Arabia led to the closure of the neutral zone Khafji and Wafra oilfields.

The two fields together pumped more than 500,000 bpd which was equally shared between the Gulf neighbours.

"We have an ambitious plan to raise output by the end of the year to the level before" the stoppage, Loughani said.

Kuwait has been pumping around 2.9 million bpd for several months.

Khafji was shut down by the Saudi side in October over environmental issues and Wafra was closed last week for a two-week maintenance. Sources said production will not resume before the dispute is resolved.

According to the Kuwaiti daily Al-Jarida, the emirate has requested arbitration in the dispute.

The halt in production is a blow to Kuwait. Unlike its much larger neighbour, it has little spare output capacity to compensate.

Industry sources say Kuwaiti authorities were unhappy with Saudi Arabia for renewing an agreement with Saudi Arabian Chevron for 30 years in 2009 without consulting them.

In response, it has stopped issuing or renewing visas for Chevron employees.

The halt to output comes amid a worldwide supply glut that has driven down prices of crude.