The company had sought an extension to contracts with Spetco and Schlumberger, but was turned down and asked to complete them at no additional cost

The Kuwait Oil Company’s (KOC) request to extend the tender contract with some companies working to establish the Jurassic production facilities has been turned down, subjecting the companies in question to fines for delays.

A few months back KOC had sought to extend two contracts (for the second time) worth $40 million with Schlumberger, said an Arab Times report.

These include contracts for Jurassic production facilities in East and West Al-Rawdatain, West Sabriya and Umm Naga. The contracts are for a period of 608 days, starting from May 21, 2022.

The Central Agency for Public Tenders (CAPT) had initially postponed the decision on KOC’s request for an extension, but last month chose to deny the extension, the report said.

It is understood that penalties will apply for the delay in completing the current phase and at no additional cost, it added.

In another instance, CAPT also denied KOC’s request to extend (first extension) the contract with Spetco International Petroleum Company for developing Jurassic production facilities in East and West Rawdatain, West Sabriya and Umm Naga. This contract worth $398 million is for a period of 512 days and starts from December 1, 2022.

Location map of Kuwait showing oil fields, Jurassic wells and location of cross-sections

The CAPT cited delays in completing the implementation of the first and second phases in accordance with the terms of the contract, and ruled that the current contract will be continued without any increase it its value and work undertaken at no additional cost.

CAPT, however, did agree to another KOC request, made to reduce around $343,000 from the value of the contract done with Combined Group Company for works on Jurassic production facilities in North Kuwait. An extension of 365 days was also granted to the contract, the report said.

The projects by Schlumberger and Spetco are part of the Jurassic Basin development located in the northern area of Kuwait, and that constitute an important stage of develop free gas production in Kuwait.

The Jurassic reservoirs were discovered in the northern Kuwait fields of Rawdatain, Sabriya, Dhabi, Umm Naqa and Bahrah.

This necessitated the construction of Jurassic Production Facilities (JPF) for the production of light oil and non-associated gas.

Accordingly, three JPFs were established. The JPF1 (Sabriya and Umm Niqa fields) was commissioned at the end of 2017, JPF2 (East Raudhatain) in 2018, and JPF3 (West Raudhatain) was commissioned in December 2019.

Each of the JPFs has a production capacity of about 40,000 bpd of crude and more than 100 mmscfd of sour gas.

The Jurassic capacity currently stands at 550 mmscfd and 163,000 bpd, and KOC plans to boost this through the development of two new facilities: JPF 4 and 5.

Combined, the JPF-4 and -5 will have a total capacity of 300 mmscfd wet and sour gas and 100,000 bpd light crude. The JPF-4 is due to go online in February 2024 and JPF-5 in January 2024.

Once complete, the entire Jurassic gas facilities will increase Kuwait’s gas and light crude production to 820 million standard cubic feet per day (mmscfd) and 280,000 barrels per day (bpd), respectively.