The heart of KuwaitMay 26, 2017
Abdulla Al Sumaiti, deputy CEO for South and East Kuwait at Kuwait Oil Company (KOC), talks to TOGY about the upcoming projects that will support Kuwait’s oil production increases. South and East Kuwait is among KOC’s three operational zones, which also include North and West.
KOC is one of 10 Kuwait Petroleum Corporation subsidiaries, each handling a sector of the industry on behalf of the state-owned parent. Under this umbrella, KOC is responsible for all state-controlled exploration, drilling and production of oil and gas within the country. KOC is also involved in crude oil storage and supply of tankers for export. In recent years, KOC has made several important discoveries. In 2005, super-light crude with a gravity of 52 degrees API was discovered in Sabriyah and in 2006, commercial reserves were also discovered in the Jurassic reservoirs at Rahiya, Mutriba and Umm Niqa, as well as at KOC’s other fields.
• On the Burgan field: “Previously, we had primary production. Now, we are preparing for secondary production using water injection. Any reservoir in the world will start with high pressure but decline over time and water will start being produced, so you have to think about how you will deal with the water and gas and how to do reservoir management to sweep all the oil from under the surface. The biggest challenge at Burgan through 2021 will be water management.”
• On the OPEC cuts: “The contribution of production capacity for South and East Kuwait is 1.7 million bopd. However, because of the OPEC production cutback, we have to utilise this event as an opportunity to perform to preventive maintenance activities to ensures we count with reliable and – most importantly – safe facilities that will operate within the highest international standards of HSE and apply reservoir management practices to preserve reservoir energy and optimise water injection activities.”
Al Sumaiti also discussed future production plans in the South and East Kuwait operating zone. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Abdulla Al Sumaiti below.
How can KOC optimise production from the Burgan field?
We call the Burgan field the heart of Kuwait. As long as it is beating, Kuwait will be alive and healthy, ready for the challenges of the future.
Previously, we had primary production. Now, we are preparing for secondary production using water injection. Any reservoir in the world will start with high pressure but decline over time and water will start being produced, so you have to think about how you will deal with the water and gas and how to do reservoir management to sweep all the oil from under the surface. The biggest challenge at Burgan through 2021 will be water management.
We are optimising the field by focusing on three things: reservoir management; building the right infrastructure to cater for the current and future requirements (flowlines, manifolds, gathering centres and water injection facilities); and building the right capabilities and technical skills. Without these three factors, it would be difficult to face the rapidly approaching challenges of the future.
In the oil and gas industry, to make an idea into reality, it takes three to five years if we are competent and do things perfectly. Usually the cycle is from four to six years, so we always need to think ahead.
How are the South and East Kuwait fields supporting the target of 4 million bopd by 2020?
Sustaining oil production from SEK [South and East Kuwait] is key for Kuwait Oil Company. In terms of production, we are the most important asset of the company for supporting the strategic targets of Kuwait’s oil and gas industry. Maintaining a production level of 1.7 million bopd is our primary responsibility and objective.
Our asset has a variety of reservoirs at different stages of maturity, so the optimisation of production is an incremental challenge to which we are committed. We have the facilities, processes and tools to achieve this, but most importantly, we have the right people. I count on our people, the experienced professionals as well as the young ones, as they have the commitment to reach our objectives.
SEK is an asset with a strong drive towards technology, and we are constantly looking for ways to modernise our processes. We are moving towards a digital future, streaming data in real time directly from our wells and facilities straight to our operators and engineers. This will enable us to make quicker and better decisions, and to enable higher production at lower costs.
What is the role of enhanced technical service agreements (ETSAs) in attracting further collaboration with IOCs?
The establishment of ETSAs with IOCs is a strategic initiative in Kuwait’s oil and gas industry. In SEK, the ETSA was established with BP and aims to provide technical advisory support to our asset through the deployment of BP experts, who will assist in enhancing production efficiency and reserves growth.
We are committed to developing local capabilities and talents by improving their technical and management skills through close collaboration with BP. Our ETSA with BP is already providing early wins, particularly for the water injection development plans of Wara, one of our key reservoirs for which we have set tough production targets in tight timeframes. There are close to 20 BP employees in Kuwait with another 20 coming. I am looking forward to more results from our 10-year collaboration agreement with BP.
What are KOC’s production capacity and future production plans?
As mentioned, the contribution of production capacity for SEK is 1.7 million bopd. However, because of the OPEC production cutback, we have to utilise this event as an opportunity to perform to preventive maintenance activities to ensures we count with reliable and – most importantly – safe facilities that will operate within the highest international standards of HSE and apply reservoir management practices to preserve reservoir energy and optimise water injection activities.
In terms of capacity, today we have 1.7 million bopd and we aim to reach and sustain 1.7 million bopd as available production in 2020.
Our challenges keep changing as we go through the life cycle of the different reservoirs in the field.
Parts of the field are relatively mature and the main challenge is to access the remaining oil and to manage the increasing volumes of produced water. Other parts are still at an early stage and require further appraisal to fully access their reserves. We also have medium-maturity reservoirs that have not been fully exploited and require water injection to support their pressures in order to produce significant volumes. The combination of managing a giant field at multiple stages in its life cycle is both challenging and interesting.
With a mature field, we face the normal issues of surface congestion and a need for a continuous programme of facility and network upgrades to meet the challenges of increasing water. Further reservoir developments also need construction of new facilities for massive injection plants and a parallel infrastructure of injection manifolds and flowlines. We are also increasing production from our sour crude reservoirs and these need specialised facilities, infrastructure and management systems.
As mentioned earlier, we are managing new developments alongside maturing reservoirs and it’s all about smart integration of subsurface, drilling and surface challenges. One of the first things I did was to create an organisation where integration of our business is central to everything we do. We call it Integrated Business Management. It is only as we go beyond the boundaries that we build around us that we really make a difference.
What is the progress of KOC’s plan to have 1,000 electric submersible pumps (ESPs) in Burgan by 2030, fed by an ESP power distribution network?
ESPs and other pumping systems have been a game changer for SEK. They have enabled the increase of liquid rates from our wells despite the increasing maturity of our reservoirs and resultant lower pressures and higher water production rates.
Our first pumps were installed in 1999. In 2010, we had 30 wells with ESPs. That number is more than 350 wells in 2017. This huge growth in deployment grounds my confidence that we will be able to achieve our target of 1,000 ESPs in SEK well in advance of 2030.
The power project for SEK is an important element of the ESP plan, as we move away from operating them using diesel generators. The availability of electricity will increase the reliability of the ESPs while simultaneously reducing the cost of operating them. There are 600 wells planned for connection by the end of 2018 and 600 more by 2023.
How has Kuwait been able to weather the low oil price environment and increase its rig count from 80 to 120?
The diverse and abundant oil resource base in Kuwait provides the flexibility to adjust production in response to changing economic conditions. Production can be increased to partially offset crude price declines in concert with cutting non-essential costs.
Increasing the rig count in the South and East fields operations has enabled acceleration of field development opportunities. More rigs provide both increased well production capacity and the opportunity to better manage reservoirs through greater flexibility in ongoing drilling.
What is the progress of the water injection facility?
The major water injection facility, the Wara Pressure Maintenance Project, is well into its commissioning stage, injecting more than 350,000 barrels of water per day. Drilling in support of production and future pressure maintenance projects is continuing on schedule and as planned. We are investing close to USD 18 billion through 2021 to build water injection facilities that are dynamic and flexible. You have to maintain the pressure, have good reservoir management and produce and process this oil.
Over the course of 2016, we started the tender process for the third part of the Wara Pressure Maintenance Project, which will come on line in 2020. The objective is to reinforce the oil production from Wara and other reservoirs for the coming decades.
We are very excited by a new and highly efficient concept to combine water handling and water injection facilities into four world-class water treatment facilities. This will save Kuwait considerable money and preserve more of the valuable land in the Greater Burgan field needed for well development. These facilities will enable us to handle a huge increase in both water production and water injection, which are vital for sustaining SEK’s oil production.
Finally, we are moving forward with GC-32 [oil gathering centre 32]. This is principally being built to allow the sour, hydrogen sulphide-rich oil from the Minagish reservoir to be handled inside the Burgan field. Currently, the oil from this reservoir is piped 30 kilometres to facilities in West Kuwait that can handle this sour crude. Installing our own facility enables us to increase production from Minagish and reduce the risk associated with moving these fluids such a long distance.
What is the role of the Competency Training Centre in the future of Kuwait’s oil and gas industry?
The Competency Training Center will be one-of-a-kind in Kuwait and the oil and gas industry. We will train our people as if they are operating a live gathering centre, and after that we’ll certify them and send them to the gathering centre.
In five years, I’d like KOC to work as an IOC. That’s why BP is here and that’s why we have to change management, culture and the way people think. We need a culture of teamwork and team ownership. We are now at a critical time to change this mindset.
It will take time and requires patience and the right leaders to carry out. For Burgan alone, we are planning to hire 130 new graduates, both male and female. Especially in Burgan with BP, within three to four years these 130 people will be a strong foundation that can manage challenges. Our asset is these new graduates. To do it right, we have to focus on the people and the new graduates. We have to listen to the future and prepare for upcoming challenges.