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Sunday , December 5 2021

‘Oil production to hit 3.5 m bpd’

‘KOC implementing many strategic projects’

KUWAIT CITY, Oct 25: The CEO of the Kuwait Petroleum Corporation (KPC) Hashem Al-Hashem says the Kuwait Oil Company (KOC) is implementing a number of strategic projects that will have a direct impact on increasing the production capacity in the coming period, in preparation for gradually reaching a sustainable crude oil production capacity of 3.2 million barrels per day in 2025, reports Al-Rai daily. In his statement to Kuwait News Agency (KUNA), Hashem explained that the reports being circulated about the decrease in the production capacity of KOC in the past years gives an incomplete picture of the performance of the oil sector particularly of KOC.

The company harnesses all capabilities to achieve the targeted production capacity. During the COVID-19 pandemic, it was successful in operating the heavy oil project and achieving the targeted production capacity of 60,000 barrels per day in September. There is additional production capacity of 500,000 barrels per day that will enter service upon completion of the projects, as well as the drilling and well maintenance plans being implemented this year and next. The divided zone will add 350,000 barrels per day, bringing the daily total production capacity of the State of Kuwait to 3.5 million barrels. The most important of these projects is the project to operate two new as sembly centers in the north and south-east regions of Kuwait, and to develop and modernize a number of assembly centers. There is also another important project for adding facilities to deal with water associated with crude oil production.

Another important project is the one to implement and operate water injection facilities in reservoirs to raise the production capacity and maintain reservoir pressure. Also, there is a project to develop the existing production facilities and implement the operation of two new facilities, which will contribute to the production of free gas and light crude oil. These projects and plans will be accompanied by an integrated program to drill an average of about 500 wells annually, in addition to more than 2,000 well maintenance operations. There are currently about 71 drilling rigs operating in various areas of KOC, and about 62 additional towers to carry out well maintenance operations. The operations in the divided area, based on the agreement between the Kuwaiti and Saudi partners, are progressing at an “encouraging pace”.

A number of plans were agreed upon in both the Al-Khafji Joint Operations Area and the Joint Wafra Operations Area. The company is working on increasing the production capacity in the year 2022 to levels exceeding what it was before closing. Al-Hashem highlighted the role of KOC during the COVID- 19 pandemic in continuing to implement work plans despite the closures around the world which affected the work of contractors and their ability to implement projects. He stressed that the efforts of KOC eventually resulted in the operation of assembly center 31 in North Kuwait, which was designed with a production capacity of 100,000 barrels of crude oil per day. Al-Hashem affirmed the State of Kuwait’s constant keenness to fulfill its obligations towards customers in the global markets and to continue playing its role as a safe and secure provider of oil and petroleum products.

Meanwhile, sources from the oil sector reported that the volume of contractors’ claims to the Kuwait National Petroleum Company (KNPC) amounted to about KD 1.318 billion, including claims being studied and not yet decided by the company as of the end of March 2021 amounting to about 1.296 billion, while claims to contractors settled during 2020/2021 amounted to KD 21.965 million. They explained that some of the claims are under study and have not been decided upon or settled. They reach large sums with some amounting to 29.5 percent of the contract value. This is due to the existence of claims that constitute a large percentage of the contract value. Some contractors have been exaggerating the value of the claims, and intentionally offering prices that are high in claims so that they are in a better position when counterclaims arise from the company or when negotiating, and the company needs to issue some changes and additions to meet requirements created during implementation. Regarding the existence of old claims dating back to previous years, the sources attributed this to the fact that some contractors resubmit their claims and submit them with responses and other analyzes to the same claims, in an effort to obtain the largest possible compensation, Some of them submit documents related to the claim on several large successive stages, which entails the company to have studied them more than once. This results in an increase in the time needed to settle these claims, especially with some contractors changing the claims in terms of value and content during negotiation, which results in the company re-examining them.

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