Jamal Abdulaziz Jaafar, CEO, Kuwait Oil Company (KOC), shares his thoughts on prospects for Kuwait’s oil and gas industry in advance of the Kuwait Oil & Gas Summit
What do you think are the main opportunities and challenges in Kuwait’s energy industry?
Global oil and gas consumption continues to grow and represents 57 per cent of total global primary energy consumption. Both fuels will continue to be the main source of energy for several years to come. That represents a strong opportunity to expand our market share through OPEC. KOC has been, for several years, focused on implementing a growth strategy, given our large reserves base and our advantage of having the lowest costs in the world.
Certainly, these growth opportunities will face important challenges. We are moving to develop production in more complex reservoirs onshore that will require the application of advanced production techniques. We are also going to initiate the development of offshore oil and gas resources in the upcoming years. I would say that the most significant challenge would be to keep our staff updated in the knowledge of the oil and gas business and in the implementation of new technologies that we will need to develop our resources. That is requiring a strong effort in training and in the transfer of technology from our technology-providing partners to the new generations of professionals through an integrated and collaborative work environment. Knowledge and experience are critical success factors to achieve our vision and our strategic targets.
How do you see the future of the relationship between K companies and the IOCs?
I can summarise this future in two words: integration and collaboration. The participation of the IOCs through the Enhanced Technical Service Agreements is becoming a win-win relationship with KOC, not only through the technical support received from them, but also through the knowledge transfer that is taking place that is benefiting our organisation and Kuwaiti staff. We need to go proceed in this integrated and collaborative model of participation, and therefore, I can see a strong relationship with them.
What are KOC’s main objectives for the next five years, and how do you plan to achieve these?
KOC is aiming to increase oil production capacity to 3.65mn bpd by 2020, from the current 3.15mn bpd and non-associated gas to grow from around 200 to 500 MMSCFPD. There are several projects at different stages of implementation that are making Kuwait’s oil and gas industry one of the most active and fastest growing in the world. By the first quarter of 2018, three new facilities will allow KOC to increase light oil production by 120,000 bpd, together with additional 300 million standard cubic feet of non-associated gas from the Jurassic reservoirs located in North Kuwait. We are going to commission three gathering centres now under construction in North Kuwait. Overall, these new GCs will add 330,000 bpd of capacity by 2018, providing a very important contribution to the increase of total KOC production capacity.
We will start heavy oil production from Lower Fars in North Kuwait, and by 2020, we will be producing 85,000 bpd. The development of heavy oil production is being done in parallel with the construction of AI-Zour refinery by our sister company KIPIC. Both projects represent an important challenge to our companies, and a constant coordination between us is taking place on a regular basis to ensure a complete success in their commissioning. We are also undertaking water injection projects in South and East Kuwait; a new booster station to increase gas-handling capacity and to continue reducing flaring in West Kuwait; and the power substations needed to provide energy to these facilities.
At the same time, an intense drilling campaign is significantly increasing the rig count. Current drilling activity across all fronts - existing reservoirs, new areas, heavy oil and Jurassic gas - is the highest in KOC’s history. All these projects constitute an immense effort carried out by KOC to ensure the achievement of our strategic targets by 2020.
Jamal Abdulaziz Jaafar will be speaking on Day 1, Session 3 of the Kuwait Oil & Gas Summit, which takes place from 17-18 April in Kuwait. www.cwckuwait.com
