Hormuz crisis sparks Kuwait’s global energy pivot

KUWAIT CITY, April 6: With the current losses suffered by the Kuwaiti and Gulf oil sectors due to the closure of the Strait of Hormuz amid the ongoing war between the United States and Israel against Iran, the daily inquired about the possibility of Kuwait expanding its overseas oil and gas exploration to partially offset potential future losses if the Strait of Hormuz is closed again. According to oil expert and analyst Kamel Al-Harami, the best course of action for the Kuwaiti oil sector is to focus on expanding domestic exploration, especially since Kuwait currently produces approximately 2.6 million barrels per day, before any export disruptions caused by a closure of the Strait of Hormuz.

Once Kuwait’s production reaches 3 million barrels per day, the country could then consider expanding internationally. Al Harami stressed that investing in foreign oil resources would require billions of dollars, and emphasized that this step could only be undertaken if the Kuwait Petroleum Corporation (KPC) had the necessary budget. Meanwhile, oil expert Dr. Abdullah Al-Kandari supported the view that KPC should expand its overseas oil and gas exploration activities. He explained that current circumstances make it necessary to diversify KPC’s revenue streams.

Kuwait already has three companies operating internationally - the Kuwait Gulf Oil Company, which manages joint operations of the Khafji and Wafra oil fields in the divided zone with Saudi Arabia, the Kuwait Foreign Petroleum Exploration Company (KUFPEC), and Kuwait Petroleum International. Al-Kandari emphasized that international exploration requires patience, citing KUFPEC as an example, which has shifted from losses to positive returns in recent years. He stressed that KPC’s investments are spread in India, China, and Pakistan, with regional offices in Japan and South Korea, in addition to investments in Australia, Vietnam, Oman, Egypt, and Italy. Al-Kandari noted that KPC’s strategy is clearly focused on diversifying its revenue sources.

An official report issued by KPC revealed that the oil sector is making significant efforts to enhance the efficiency of operational processes in exploration and international oil projects. The report highlighted ongoing efforts to improve the Khafji joint operations to maximize the utilization of available resources. It explained that the average daily production of exportable gas reached approximately 14.64 million standard cubic feet per day last year. Production of exportable natural gas liquids reached around 4,190 barrels per day, while crude oil production reached an impressive level of approximately 128,000 barrels per day.

The daily production rate of the Wafra joint operations increased to approximately 77,520 barrels per day, along with the shipment of about 22 million standard cubic feet of associated gas to Kuwait Oil Company (KOC). KOC has completed drilling operations on three new wells as part of its development plan. Exploration in the North Wafra area led to the discovery of new oil reserves in the Ibra and Ramthan reservoirs, with daily production ranging between 260 and 380 barrels per well. Regarding KUFPEC, the report confirmed that the company has achieved significant global successes in recent years, reporting revenues of $1.47 billion and net profits of $737 million in its latest financial statements. KUFPEC’s operations cover five continents through projects and assets in Australia, North America, Asia, Africa, and Europe, contributing to the diversification of its investment portfolio and strengthening its global presence. KUFPEC recently discovered a new oil well in the Geisum and West Tawila concession in the Gulf of Suez, Egypt, which enhances its production capacity in North Africa.

The company continues its strategic achievements in Canada, having completed its first contract in the Kaybob- Duvernay shale gas project, where production increased from 750 barrels of oil equivalent per day to 25,927 barrels per day by the end of last year. KUFPEC also recorded 6.2 million safe work hours without any injuries at its non-operational assets. In Indonesia, the company secured two major blocks in the first round of direct bidding - the Melati block, the largest in the tender, and the Amana block in South Sumatra. This expansion reflects KUFPEC’s commitment to growth in Southeast Asia. Production capacity in Australia was increased, with the pilot phase contributing to a seven percent rise in the local gas plant’s capacity, reaching 210 million standard cubic feet per day. The KPC report highlighted KUFPEC’s outstanding achievements in the manufacturing sector through its strategic overseas projects.

At the Nghi Son refinery and petrochemical complex in Vietnam, KUFPEC successfully distributed low-sulfur diesel under a petroleum products purchase agreement. The refinery maintained operating rates exceeding its design capacity by 120 percent. Regarding the Duqm Refinery project in Oman, the report noted that KUFPEC made significant progress in collaboration with the Omani OQ Group as part of its operational transformation efforts. Several quality initiatives were implemented, resulting in cost savings of US$41.1 million as of March 2025.

The report stated that the Milazzo Refinery recorded zero accidents for four consecutive years as of May 2025. This achievement reflects the efficiency of the operational team, the strength of the organizational model in place, and the effectiveness of the refinery’s safety culture. The modification of the Milazzo refinery’s vacuum unit to process sour crude oils was completed, enhancing the refinery’s operational flexibility and its ability to refine multiple types of crude oil.

By Najeh Bilal Al-Seyassah/Arab Times Staff