Kuwait’s Joint Operations shift into a higher gear

Kuwait

Khaled Nayef Al Otaibi, CEO of Kuwait Gulf Oil Company (KGOC), talks to The Energy Year about the challenge of boosting production from mature assets and the company’s fruitful collaboration with its Saudi partners. KGOC is the KPC subsidiary that manages Kuwait’s oil and gas operations in the Partitioned Zone between Kuwait and Saudi Arabia.

What are the main barriers preventing a better monetisation of the hydrocarbons in the Partitioned Zone, and how do they impact the domestic economy?
There was a prolonged shutdown in both of our Joint Operations starting in 2014, which halted the progress of our growth projects. We resumed production in 2020, and our focus in the first few years was to bring existing wells and facilities back on line, but our ramp-up plan was then further delayed by manpower constraints due to Covid.
Our fields in Wafra are quite mature and our production costs are relatively high, but with the support of our partners and our able workforce, we are turning the tide from stabilisation to growth with field extensions, IOR [improved oil recovery] and EOR, as well as new exploration and appraisals.

What are the latest developments at Khafji Joint Operations?
We are focusing on stabilising and enhancing Khafji crude production to reach 300,000 bopd on a permanent basis. Initially, we operated only two flow stations out of four due to safety and integrity concerns, but after a thorough inspection and evaluation, the remaining two flow stations were also commissioned in 2023.
To re-start Hout crude production from the Khafji field, we are laying a second transmission line which is at an advanced stage of completion and expected to be commissioned in 2024. We are also working on drilling new development wells in the Khafji field in 2024 and commencing a 3D seismic survey of the entire offshore PZ [Partitioned Zone] in Q1 2025.
In terms of production, our share averaged 90,000 bopd in 2023 and we expect it to reach 175,000 bopd in 2028.

Where does the production from Wafra stand?
In the first few years after production resumed, our focus was to bring existing wells on line. We have successfully done that with approximately 1,000 wells, which puts us very close to the number of wells that were active before the shutdown, and we are now focusing on enhancing our production capacity by drilling new ones.
We mobilised three drilling rigs in 2023 and expect to add two more in 2024, which will join our 12 existing workover rigs. In addition to stabilising production from our existing wells, we are also working to increase production via acid fracking, as well as field extensions and new exploration wells in this location also. We have successfully completed a single well injectivity test for chemical EOR using polymer flooding and are moving towards testing multiple wells before carrying out a full field expansion. Our share of production averaged 77,600 bopd in 2023 and we expect it to reach 129,400 bopd by 2028.

What is the way forward for KGOC to strengthen its position as an upstream player?
We are working with world-class partners who have decades of rich experience in oil and gas. When entities unite, each bringing its unique strengths to the table, they are better positioned to address the challenges of the business environment. KGOC has cultivated partnerships with AGOC [Arabian Gulf Oil Company] and SAC [Saudi Arabia Chevron] over several decades, and through these collaborations, we can harness new technologies to accelerate hydrocarbon resource optimisation and transform opportunities into tangible business value. The key is to work with our partners to enhance production while learning and developing our own capabilities.

How does KGOC differ from the other K-companies?
The dynamics within our company are different. Whereas other K-companies make their own decisions, we work together with our Saudi partners to align our strategies and investment plans.
As of today, the alignment is optimal. We have agreed on several projects, and KGOC has already started talking with the KPC board to secure a development budget. Although some of them are challenging, I am confident that we will achieve outstanding results in the future if we keep working as we do today.

What are the main projects you are currently carrying out?
The Dorra Gas Field Development Project is the most important venture for us at the moment, and it is also of great national importance and pride. After years of technical discussions, an MoU for development was signed in December 2022 between KGOC and Aramco Gulf Operations Company and we are working hard to finish the project by 2028.
We are equally concerned about our environmental footprint and actively working on reducing gas flaring, aiming for substantial abatement from 2026. To mitigate gas flaring at KJO [Khafji Joint Operations], we have laid out a new gas transit line from KJO to KNPC’s refinery to export our entire share of associated gas, including sour gas, so up to 40 mcf [1.13 mcm] per day. We will also export our entire share of 6,600 boepd of condensate.
In a similar vein, we are working on the Central Gas Utilisation Project to comply with EPA [Environment Public Authority] regulations and eliminate routine gas flaring at WJO [Wafra Joint Operations]. Procurement and construction are ongoing, and the current plan is to complete the project by Q4 2025.

Can you guide us through your approach to the Dorra project and some details about how you plan to channel the gas?
We are considering options to fast-track all our projects. To expedite Dorra, we started procuring long-lead items (LLIs) before finishing the FEED as per standard practice, since delivery of LLIs will take more than 18 months and we hope to receive the material by the time we need to mobilise the EPC contractor. In addition, we are expediting the tender approval cycle for this project and, together with our partners, we are doing very well. At the current pace, we should start producing gas by end-2028 at the latest.
Dorra is an offshore field with a target production of 1 bcf [28.3 mcm] per day of gas and 84,000 boepd of condensate, so our share will be half of that. The plan is to have seven jackets with five wells each, for a total of 35 wells. Output will go into the CGP [Central Gas Processing] facility, which is 50-50 owned by Kuwait and Saudi Arabia. As of now, we have finished the initial feasibility studies and commenced the FEED for Dorra and the onshore processing platform that KGOC is constructing in Kuwait.

Read our latest insights on:

• Kuwait
• Saudi Arabia