KUWAIT CITY, Sept 1: Kuwait has taken many steps to expand its domestic energy sector, reports Al-Rai daily quoting the Oxford Business Group.
The group noted in a report that the visit of Saudi Minister of State for Energy Affairs Prince Abdulaziz bin Salman, to Kuwait last July, included discussion of technical points related to reproduction of oil in this regard.
The report showed that the joint area is capable of producing 500 thousand barrels of oil per day, which is equivalent to about 4 percent of the total production of the two countries last June.
While no final agreement has yet been reached, Oxford Business said officials hoped bilateral talks would lead to a resumption of production, citing earlier comments made by the Saudi Energy Minister Khalid al-Falih that both sides have reached an agreement.
While Kuwait is committed to the Organization of Petroleum Exporting Countries (OPEC) production quotas, which are expected to remain in force until at least March 2020, any resumption of activity in the common area would help achieve the long-term goals of upstream expansion.
Although business has increased to around 2.7 million barrels per day since the imposition of OPEC quotas in 2017, Kuwait is still below the required commitment.
However, the country aims to increase this figure to 4 million barrels per day by 2020, according to Oxford Business. It also hopes to produce 350,000 barrels per day from the joint area.
To this end, the Kuwait Oil Company (KOC) has announced in July that it had signed a three-year, $597 million contract with the US oil services company Halliburton, which will drill six high-pressure wells and other hightemperature wells in two locations off the Kuwaiti coast.
According to the Oxford Business Report, Kuwait’s ambitious plans, which include large-scale projects such as the creation of an integrated energy industry, include the production of large levels of natural gas.
The country plans to significantly increase non-associated natural gas production to 2 billion cubic feet by 2040. Recent projects in this sector also include drilling 15 deep wells in the Jurassic formations in the north of the country. On the other hand, the report pointed out that efforts are being made to increase post-production capacity, pointing out that Kuwait Petroleum Corporation (KPC) has set plans to increase domestic refining capacity to almost triple, from 701 thousand barrels per day in 2017 to two billion barrels by 2035 by upgrading the existing refineries and building new facilities.
Major projects include a $13 billion Al-Zour refinery, with a production capacity of about 615,000 barrels per day, expected to be operational by the end of 2020, a daily LNG import terminal with a capacity of 3 million British thermal units, and the inauguration a petrochemical plant with a capacity of 2.8 million by 2024. Kuwait’s gross domestic product (GDP) grew 2.6 percent in the first quarter, while the International Monetary Fund (IMF) expects growth to accelerate to 2.9 percent in 2020 and 2021.