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‘Fulfillment of Europe’s energy supply needs to hamper KOC operations’
KUWAIT CITY, Feb 16: The Gulf states are facing challenges to increase fuel production capacity to meet the European demand, which is likely to grow over time as long as the confl ict in Eastern Europe persists for a longer period, reports Al-Qabas daily. The European countries are increasingly resorting to producers in the Gulf region to fill the shortage they experience because of cuts in Russian energy supplies. Global markets face an increasing risk of a shortage of diesel in the coming period, as long as the Europeans are determined to keep in place the ban on Russian imports. Senior oil sources told the daily that there is increasing pressure on most refineries in the Gulf region and the Middle East, especially Kuwait and Oman, after the European ban on all types of fuel coming from Russia, including products from jet fuel to gasoline and diesel. According to the same sources, in the face of the increasing European demand for fuel products, Kuwait, which intends to increase the fl ow of diesel to Europe and double its shipments of jet fuel, had to sacrifice reducing diesel supplies to Kuwaiti oil companies, pointing out that the Kuwait National Petroleum Company asked fellow oil companies including the Kuwait Oil Company to reduce its use of diesel in its operations to meet the needs of the local market and global demand.
KOC sources said the request to reduce the use of diesel in the company’s operations to provide the needs of the European market will have a negative impact on KOC operations in well services, which will reflect on vision to increase the oil production and increase operations in drilling rigs. The sources said the number of KOC drilling rigs stands at more than 65, and the number of well services operations is expected to rise during the current year to more than 20,000 to meet the demands and achieve the goals of increasing oil production, as these goals require an increase in the use of the diesel product, pointing out that the repercussions of the Russian- Ukrainian war will increase the expected losses due to the inability of the country’s refineries to provide the diesel requirements for the local market.
The sources indicated that the production goals of the Kuwait Oil Company is to reach 2.8 million barrels per day, as the current production does not exceed 2.65 million barrels, explaining that in the face of pressures to reduce the supply of the company’s operations with the required fuel, it will inevitably affect achieving the targeted production capacity of crude oil.
The sources added that the gas production goals are to maintain the KOC capacity to produce more than 560 million cubic meters per day, and this matter constitutes an additional challenge for the company in the face of the lack of supply of the required fuel for its operations. Note that Kuwait plans to increase exports of diesel and jet fuel to Europe this year, five times over what it was in 2022, to reach about 50 thousand barrels per day, and Kuwait also wants to double sales of jet fuel to nearly 5 million tons.
The KNPC sources said the Al-Zour refinery is considered the cornerstone of meeting the growing demand for energy, as the facility will provide, when operating at full capacity, about 615 thousand barrels per day, pointing out that the refinery succeeded in sending its first exports of diesel and jet fuel late last year. . The European Union faced fuel pressure starting next February 5, when a ban on importing refined petroleum products from Russia came into force, as part of European sanctions against Russia. According to Bank of America, diesel prices may rise in the first quarter of this year to $200 a barrel, because the embargo may lead to a global shortage. The European Union was buying about 1.3 million barrels per day of refined oil products from Russia until the end of last year, half of which was diesel fuel.