THE recent announcement by Kuwait Petroleum Corporation (KPC) came as positive news. The discovery of the new light crude oil adds significant value to Kuwait’s existing medium to heavy crude oil reserves. This discovery of about three billion barrels is equivalent to roughly one year of Kuwait’s current oil production. The discovery site is situated in the eastern part of Kuwait’s largest island, Failaka.

It will likely take five to seven years to commence oil production from this discovery, even though there is potential to expedite this timeline with the assistance of international oil companies. This collaboration aims to accelerate the availability of oil to global markets at the earliest.

The challenge lies in engaging international oil companies to maximize production efficiently without loss of volume, as they are the most efficient operators worldwide. It is crucial to work with them as soon as possible, as our companies will not be able to reach the target or achieve the maximum potential from our oil discoveries.

The loss of revenues from the northern field can be considered as an example. We were unable to reach the oil well’s potential of one million barrels per day, as the current estimates are between 650,000 to 700,000 barrels per day. In addition to light crude oil, there is also an additional volume of associated gas accompanying each barrel of crude, which is not free. This discovery is positive news indeed, and we must expedite its production without delay. Kuwait is desperate for new oil discoveries, as our overall production is on the decline since 2016-2017.

Excluding the neutral zone production, we have not achieved three million barrels of crude oil production, and are unable to maintain continuous onstream production. This once again necessitates the experience of foreign oil companies. Our oil industry executives seem shy about stating the desperate need for assistance and inviting international major oil companies. Why can’t the KPC approach the government and have an open and frank discussion about our internal difficulties, lack of experience in deep well developments and water management issues?

In the meantime, we should reconsider the retirement of executives who completed 30 years of service, and welcome expatriates of the same age from oil services companies! KPC is not under any pressure from the parliament and will operate in harmony with the government. Is it not time to look forward and increase Kuwait oil production to reach 3 to 3.5 million barrels per annum within the next two to three years without any fear of grilling? More oil discoveries in Kuwait’s territorial waters are expected and welcomed, but it also has to expedite ways and means to bring the new discoveries onstream at the earliest. The challenge lies in bringing these newly discovered barrels into production swiftly and ensuring they are officially registered as fresh oil volumes in international records.

By Kamel Al-Harami
Independent Oil Analyst

Email: [email protected]