Kuwait’s offshore campaign enters a new era

Kuwait

Shaikh Nawaf S. Al Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation (KPC), talks to The Energy Year about projects which will increase Kuwait’s oil and gas production and the state of Kuwait’s offshore drilling campaign. KPC is Kuwait's national oil company, which focuses on petroleum exploration, production, petrochemicals, refining, marketing and transportation.

This interview is featured in The Energy Year Kuwait 2023

Which are the strategic pillars underpinning your vision for the next five years?
The strategic goal for KPC over the coming period is to achieve a sustainable leadership position in the oil and gas industry using world-class standards of operational excellence for the benefit of the State of Kuwait. We will also continue to optimise our portfolio and capitalise on opportunities in innovation, digitisation and growth opportunities while we maximise the value of Kuwait’s hydrocarbons endowment.
We will meet the State of Kuwait’s current and future energy demand and provide an economic and sustainable energy mix with renewable and other energy sources wherever they add value to KPC’s businesses and help achieve Kuwait’s climate goal commitments.

Which projects are going to ensure Kuwait’s path towards increased oil and gas production and efficiency?
In terms of the domestic upstream sector, we are focusing on increasing Kuwait’s sustainable crude oil production and non-associated gas capacity, including our share from the Divided Zone. In addition, we are exerting a lot of effort and resources to add proven oil and gas reserves to compensate for the produced hydrocarbons.
We have been producing oil and gas for eight decades. As our fields move from primary to secondary recovery, we must introduce new reservoir management and extraction techniques to maximise the recovery from these fields. At the same time, we are continuing to explore for and discover new reservoirs.
We are working on several projects to increase our oil and gas production capacity and improve our efficiency, such as increased infill drilling, implementing gas and chemical enhanced oil recovery (EOR) applications for tertiary oil production, running 3D seismic surveys on different fields and continuing to explore, appraise and delineate potential opportunities in different fields. We also plan to increase the gathering centres’ capacities and install more water-handling and injection facilities.

How significant is Kuwait’s current offshore drilling campaign? What are the increase in production expectations?
The offshore exploration drilling project is an important and strategic project for KPC and the State of Kuwait. It launches a completely new era of exploration and extraction of the offshore resources on the Kuwaiti continental shelf. It will be a major contributor to the remaining oil potential targets of KPC’s Strategy 2040 plan. We believe it will contribute approximately 25% of the total potential hydrocarbons to be delivered.

What is your assessment of the completion of the Al Zour refinery project? How important is the Clean Fuels Project to position Kuwait as a leading exporter of petroleum products?
The Al Zour Refinery Project is one of the major strategic initiatives for expanding the refining capacity of KPC. It consists of three refineries, each with a capacity of 205,000 bpd. The Al Zour Refinery will produce around 340,000 bpd of high-quality refined petroleum products with low sulphur content, in compliance with export specifications for international markets. In terms of the timeline, we just announced the start-up of the first stage of the refinery. The other stages will be commissioned in sequence.
As for the Clean Fuels Project, which we commissioned early in 2022, it is a major refinery upgrade at Mina Abdullah and Mina Al-Ahmadi refineries. This project produces low-sulphur fuels suited to Euro 5 standards, reduces carbon emissions and meets the needs of our European customers. Cargos of ultra-low-sulphur diesel reached our terminal in Europe and the diesel is now being sold at our Q8 service stations in Italy.

How important is the development of Kuwait’s petrochemical sector? Which are the key timelines and investment figures for the future Al Zour petrochemical complex?
The development of Kuwait’s petrochemical sector is of critical importance to KPC’s Strategy 2040. In this field, we are working on expanding base petrochemicals and downstream derivatives linked to base petrochemicals production inside and outside the State of Kuwait. We plan to do this via new builds/expansions and M&A activities, with suitable international partners to achieve a leading position globally.
As for the future of the Al Zour petrochemical complex, we are currently assessing what the optimum configuration of the integrated petrochemical complex and the size of investment should be, as well as looking into the viable partnership model.

Which carbon-reduction actions is KPC taking in order to ensure the sustainability of the petroleum industry in Kuwait?
Our vision is to supply energy resources at the lowest emissions intensity globally, commit to achieving net zero scope 1 and 2 GHG [greenhouse gas] emissions by 2050 and selectively invest in new alternative energies. As such, KPC will continue to act as a responsible hydrocarbon producer, driving the sustainability of its own operations with reduced GHG emissions and leveraging its unique platform to develop new energy businesses.
As part of the scope of our energy transition, KPC and its subsidiaries will address emissions and position the company to capture new businesses created by low-carbon technology through emissions abatement and investment in new energy businesses.

How important are digital transformation projects in KPC’s overall strategic plans?
The oil and gas industry is undergoing a significant transformation due to several factors. The dynamic forces that are acting across the modern energy system require greater agility to respond to supply and demand requirements. This will create new imperatives for the industry and require vastly different capabilities for future success.
Our vision at KPC in this regard is to “digitalise the hydrocarbon value chain from core to customer.” We think we can achieve that vision by developing and delivering commercially viable digital solutions that enable end-to-end digitisation and integration to improve our operational efficiencies and safety, and to enhance our customer satisfaction, which will ultimately increase profitability, productivity and portfolio growth.

What is your final message to local, regional and international investors?
KPC seeks to contribute to the realisation of the Kuwait Vision 2035, which aims to transform the State of Kuwait into an attractive financial centre for investment. In this regard, we are studying and evaluating several areas for partnering with international companies in the oil, gas and petrochemical industries. Such partnerships would facilitate the transfer of related technologies, develop human capabilities and expand research and innovation. We are exploring viable means to provide encouraging incentive packages for international partners’ investment in the Kuwaiti oil sector.

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