A push to increase domestic gas production

Kuwait

Anwar Al Mutlaq, country chairman of Shell Kuwait, talks to The Energy Year about the company’s role in Kuwait’s oil and gas sector and the effectiveness of the Shell-KOC enhanced technical service agreement (ETSA) model for other markets. Shell has been operating in Kuwait since 1948, bringing Kuwait’s crude oil to international markets.

What role does Shell play in the Kuwaiti oil and gas sector?
Since 1948, Shell has collaborated with Kuwait to bring its crude oil to the global market. Currently, we have the honour of supporting the Kuwaiti oil and gas industry through several agreements. As part of these agreements, we offer enhanced technical services to three KOC assets located in the northern region of the country: conventional oil, heavy oil, and Jurassic gas.
Although each asset has distinct objectives, we prioritise three key objectives across all assets. Firstly, boosting production, which is of paramount importance. Secondly, reducing production costs, and thirdly, fostering talent and building capabilities within KOC.

Which are the latest updates with regards to Jurassic gas production?
We have successfully achieved an increase in production to approximately 570 bcf [16 bcm] per day, and we have made significant progress in identifying new reservoirs to extract additional gas. This is particularly relevant and exciting as sustaining production over time becomes critical to increasing output.
A noteworthy accomplishment was the drilling of the longest horizontal well in the Jurassic asset to date. We are also pleased to introduce our latest technology, the Shell Turbo Trays, which employ a novel design to enhance production from existing gas facilities.
In addition, we launched the Stars Program this year, which provides a secondment-type opportunity for a select few KOC staff members to work with us. The KOC team members are fully integrated into the Shell system, working alongside our teams and gaining exposure to various areas within Shell.

How strategic is it for Kuwait to increase domestic gas production?
Gas is undeniably critical for power generation, particularly given that Kuwait currently imports a significant volume of LNG. The greater the volume of gas produced locally, the less dependence on imported LNG. Additionally, gas serves as a vital feedstock for prospective petrochemical investments.
We are excited about the progress made in the gas asset and we are dedicated and committed to reaching 950 mcf [26.9 mcm] per day in the coming years, as everyone is working tirelessly towards achieving this goal.

How important is cost optimisation in heavy oil assets?
Heavy oil is a relatively more expensive operation compared to conventional oil and gas, and hence, cost optimisation is key. We support two fields in heavy oil: Umm Naqa and South Ratqa. Combined production has exceeded 80,000 bopd, which is significant given the short history of heavy oil in Kuwait.
Cost reduction in drilling wells is a crucial focus area, particularly given the anticipated drilling of up to 2,000 shallow wells in the upcoming years. To address this, we are developing fit-for-purpose drilling capabilities that can be quickly mobilised for efficient drilling operations.
Another key area of cost reduction is energy consumption. In this regard, we are exploring the implementation of a co-generation facility that can produce both electricity and steam, thereby reducing energy consumption and costs.
In summary, our priorities over the next few years will be to grow heavy oil production and to minimise our cost of production through innovative solutions.

What are the key challenges to increase the production of conventional oil?
Conventional oil is a brownfield project for KOC, which has been producing for many years.
In the North Kuwait area, KOC has reached its production target by working hand in hand with our team in-country to deliver maximum results.
It’s a complex business that requires full integration and the need to continuously improve and innovate to grow production. We have deployed new technologies into North Kuwait in the form of multi-well pads, which aim to drastically reduce congestion, increase cost savings and improve drilling and operational efficiencies. We also introduced the joint delivery team concept within KOC, where we work in an integrated way with great colleagues from KOC on this journey.

How important is it to assist KOC in its efforts to decarbonise its operations?
The energy transition is a key topic for the entire sector and remains an important focus area for Shell. Shell has been a pioneer in this field over the past few years. We aim to share our knowledge and expertise with KOC, offering purpose-built solutions for their assets.
In Kuwait, we have identified opportunities to support KOC in their effort to decarbonise their operations by exploring solutions such as blue hydrogen or CCUS within the assets we support. We also leverage our global experience to share best practices to support KOC in this critical area.

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