KUWAIT is carrying out an aggressive exploration and drilling strategy, mainly for natural gas, and is preparing to float a tender to build a fifth gas train to eventually accommodate non-associated gas reserves, senior oil executives say.
Kuwait is also actively looking for international partners to provide enhanced oil recovery (EOR) techniques to help boost crude capacity output to a targeted 4 million barrels per day (mbpd) by 2020, they say.
Officials have put the country’s current oil production capacity at 3.4 mbpd, with actual production at around 2.22 mbpd.
The need to find additional gas reserves beyond the estimated 13 trillion cubic feet (tcf) under development in the northern fields, is to satisfy the country’s ever growing electrical power generation demands.
“Yes, we are in an aggressive exploration stage and mainly we are going after the gas – all over and deep horizon. We are directing most of our effort toward gas exploration,” Kuwait Oil Company (KOC) chairman Sami Al Rushaid says. He notes that while the country’s major gas development and production is taking place in the north, seismic data is showing significant gas potential in other regions of the emirate, specifically in offshore shallow waters.
“We will probably even go offshore and we are going after the gas there. We see that there is a potential for additional gas discoveries and we are in desperate need for that for the power generation,” he says.
“We have done the offshore seismic and have an extensive seismic programme going on for the drilling effort,” he says, noting that his expectation for gas production from the shallow water areas would begin after 2020.
Last year, KOC began working with Shell under an enhanced technical services agreement to develop Kuwait’s northern gas reservers. And two years ago, Kuwait became an LNG importer to help satisfy growing electrical power demand, especially during peak demand throughout the high temperature summer months.
Al Rushaid says that meeting the 2020 goal of 4 mbpd of oil was not as great a challenge as discovering and developing additional gas. “We are already at 3.4 mbpd, so not much more remains to reach our goal,” he says, adding that Kuwait would not necessarily draw exclusively upon heavy oil reserves to meet the target, but draw upon a combination of grades from all its fields.
Deputy chairman and CEO of parent conglomerate Kuwait Petroleum Corp Farook Al Zanki says Kuwait was in continued talks with ExxonMobil for development of the emirate’s heavy oil with an API of around 18 degrees, the official Kuwait News Agency reports.
In a conference speech, Al Rushaid says Kuwait was aggressively looking for partnerships with international oil companies to provide enhanced oil recovery technology. “We cannot do it alone. We are moving forward with EOR projects and we are seeking to form strategic alliances with IOCs in these areas. We are looking for international alliances,” he says.
When asked what type of agreements Kuwait would accept to take on an international partner in EOR, Al Rushaid cites agreements suitable to both parties that also did not violate Kuwait’s constitution. The constitution forbids production sharing agreements with foreign entities, but technical service agreements and enhanced variations of them are acceptable. Shell is helping develop Kuwait’s northern gas reserves under such an agreement.
State refiner Kuwait National Petroleum Co (KNPC) has had to work in tandem with KOC synchronising development milestones with the potential shipment of extracted gas to KNPC’s fourth gas train under construction at the 460,000 bpd Al Ahmadi refinery. A fifth train is also proposed.
The fourth train, with an 800,000 mmcfd capacity, is being built at Ahmadi by South Korea’s Daelim.”They (Daelim) are supposed to finish in the beginning of 2013 or maybe we will do it some earlier time, before 2013,” KNPC deputy chairman and managing director of Ahmadi refinery Saad Al Asaad says. Kuwait’s three existing gas trains each can process around 500,000 mmcfd.
KNPC is planning to float a tender for construction of the fifth train by the end of this year, Al Asaad says. Completion of second-phase northern gas production by KOC to 600,000 mmcfd and the fourth train should be completed at the same time, Al Asaad says. KOC eventually wants to produce 1 bcfd under the gas development plan.
