KUWAIT FOREIGN Exploration Company (Kufpec) exceeded expectations last year by recording an after-tax profit of $88 million for the year, $15 million more than had been forecast.

The company attributed the increased profit to the results of an intensive phase of exploration during which it spent $334 million.

Kufpec's oil production rose by 32,150 barrels per day (bpd) last year, up nine per cent on 2000.

A subsidiary of KPC, Kufpec has petroleum interests in areas including Australia, China, Congo, Egypt, Indonesia, Malaysia, Pakistan, Sudan, Tunisia and Yemen.

The company signed an agreement last year with UK firm Premier Oil to set up a joint company for oil exploration and production in Pakistan.

The new company, Premier-Kufpec Pakistan, will aim to produce 50,000 bpd in the next five years, according to reports.

The company will also undertake the development of two existing oilfields and four oil concessions in Pakistan. The fields would produce around 5,000 bpd this year.

The formation of Kufpec in 1981 stemmed from a strategy of global diversification of Kuwait's oil industry, in which a diverse and flexible investment policy, backed by international expertise, was the best assurance of long-term profitability.

A Kufpec-financed programme of international oil and gas exploration was initiated and by the end of 1982 Kufpec's initial holdings in the US, Morocco and Oman were supplemented with interests in Indonesia, Sudan, Egypt, Congo, Tanzania, Turkey and Australia.

During the 1980s, Kufpec became an operating company in its own right, acquiring the operating rights of the North and South Kairouan permits in Tunisia. Meanwhile discoveries of oil were made in Egypt and Indonesia, and of gas in China.

In 1989, Kufpec made its first discovery of a commercial oilfield in an operated venture, the Sidi El Kilani field in Tunisia. This became the company's first integrated development and production venture.

Three years earlier, Kufpec had embarked on a 'programme of consolidation'. In 1986, its office in London, UK, was closed and the technical, commercial, legal and managerial functions were consolidated at Kufpec's head office in Kuwait.

During the occupation of Kuwait, Kufpec managed its project portfolio through temporary offices in London and then Dubai. The company's consolidation programme has seen it concentrate its efforts on existing fields, discovering and developing their incremental reserves and fulfilling its remaining exploration obligations.

Significant milestones in this 'consolidation programme' have included the signing of gas sales agreements to facilitate the development of gasfields in China and Pakistan, and the discovery of new oil and gasfields in Australia, Indonesia, Egypt and Yemen.

Particularly noteworthy are the Nebo and Osiel discoveries made by Kufpec in Indonesia as operator.

Under the Osiel development, Kufpec Indonesia Ltd is conducting an engineering, procurement, installation and commissioning project at the field.

The contract includes the installation of a fractionation unit to produce blending stocks, high sulphur fuel oil and naphtha. The field was expected to produce 18,000 bpd by the first quarter of this year.

Kufpec has invested $59 million so far in the concession, and plans to spend another $182 million in the next five years, according to sources.

Elsewhere in Indonesia, Kufpec has spent $267 million in the Natuna Sea concession, planning to invest another $98 million in the next five years.