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Kuwait Eyes Further Partnerships With IOCs To Secure Oil Production Gains

Kuwait Eyes Further Partnerships With IOCs To Secure Oil Production Gains

By Jamie Ingram, Gulf Editor MEES.

Kuwait is the fifth largest crude oil producer in Opec, and it notched up output of 2.71mn b/d last year. It has ambitious plans to ramp up production capacity to 4mn b/d by 2020, which would be a major increase from its current claimed capacity of 3.1mn b/d. With much of the gains slated to come from technically challenging sour and heavy fields, partnerships with international firms will be essential to unlocking the country’s rich reserves.

2018 is therefore set to be a major year for Kuwait’s upstream sector as a series of long-awaited projects come onstream, boosting oil and gas production capacity. Two early production facilities (EPFs) have been brought online in recent months and are currently being ramped up to full capacity, with a third due online in the second quarter of the year.

The three EPFs were constructed under contracts Kuwait signed with private firms in 2016 – two went to US-based contractor Schlumberger and the third to domestic firm Spetco – to develop Kuwait’s sour northern Jurassic fields. Once full capacity is reached, the three EPFs will produce a combined 120,000 b/d of ultra-light crude oil and more than 300mn cfd (cubic feet/day) of sour gas.

A number of such critical projects received the green light under the previous Kuwaiti parliament (July 2013 – October 2016) which enjoyed a more congenial relationship with the government than has been typical in recent years. That parliament also saw contracts awarded to international service firms to help develop heavy oil fields in the north, such as Ratqa, and critically, enhanced technical service agreements (ETSAs) to major IOCs Shell and BP.

Kuwait’s authorities are hopeful that they can maintain the momentum under the current parliament and are pushing ahead with a range of development plans. Along with a planned 220,000 b/d, 590mn cfd Jurassic production facility, Kuwait aims to award further ETSAs for heavy oil development and for increasing output from its western fields.

Rapid progress is certainly required if Kuwait is going to come close to achieving its ambitious 4mn b/d 2020 target. By comparison, the IEA’s latest estimate has Kuwaiti output capacity at just 3.1mn b/d in 2020.

The IEA’s estimate looks harsh, but Kuwait’s 2020 target does look out of reach. If it is to come close, then it cannot afford delays in its pipeline of upstream projects. And that will require signing further contracts with IOCs in the coming months. Without further partnerships with IOCs, Kuwaiti production capacity will not rise much above its current levels.

View the full article here: https://www.cwckuwait.com/wp-content/uploads/2018/04/Jamie-Ingram-CWC-Kuwait-Article-3.pdf



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