Kuwait sticks by massive expansion plans
Kuwait Oil Company reveals expansion plans are ongoing
Kuwait Oil Company is to stick by its strategic plans to increase its production capacity to 4 million bpd by 2020, according to Sami Al-Rushaid, chairman and managing director of the company.
The 2020 strategy aims to develop Kuwait’s hydrocarbon reserves, infrastructure and operational capability to best meet market opportunities while giving emphasis to the more technically challenging reserves in North and West Kuwait and maintaining South and East Kuwait production capacity.
However, the upstream sector in Kuwait has long been dogged by political stalemate, and an unwillingness to involve international partners, with the exception of the Partitioned Neutral Zone, which it shares with Saudi Arabia.
Kuwait's upstream expansion plans have been much needed for several years, but with the government and parliament rarely able to make any meangingful progress on the issue of international involvement, the existing infrastruture is increasingly going to be unable to cope with the technical challenges the national oil comapany, KOC is facing.
The country has partnered with IOCs in the past, but the notoriously low margins have made working there increasingly unappealing to the majors. In 2008 French oil major Total closed its head office in Kuwait, and in July this year Chevron closed its head office in Kuwait City. The oil major cited the inability to secure attractive enough terms to extend its operations there.
Al-Rushaid revealed that the board of directors of Kuwait National petroleum Company (KNPC) has recently approved the 2020 strategy, which takes into consideration the international variations of supply and demand. The CEO explained that they are waiting for a final approval from the High Petroleum Council.
The company claims that it will aim to maximise reserves using a value-driven process, which includes exploration, integrated reservoir evaluation and enhanced technology, to ultimately increase future development opportunities and reduce both economic risk and technical uncertainty.
Al-Rushaid added that Kuwait currently produces between 135 million and 145 million cubic feet of gas.