KUWAIT CITY, Dec 21: Standard & Poor’s credit rating agency “S&P” said that Kuwait faces challenges to raise the production capacity of crude oil to the desired levels within the country’s 2040 strategy, before peak demand deadline set for carbon neutrality in the middle of the century, indicating that Kuwait must overcome the challenges, lack of foreign investments, and aging oil fields to add new production capabilities, reports Al-Anba daily.

The agency stated that the exploration and production sector in Kuwait requires investments. Large, as the Great Burgan field faces a natural decline, and any addition to production capacity will be consumed by the continuing decline in the production of the second largest oil field in the world, which is already producing approximately 95% of its full capacity, as current production is about 1.6 million barrels per day, Supported by enhancing the extraction process through gas injection and water flooding. Assistant Professor of History at Kuwait University, Badr Al- Saif, said that Kuwait, which is considered the fourth largest oil producer in OPEC and possesses the seventh largest reserves in … The world will continue its plan as usual without being affected by many changes in energy policy that are usually left to technocrats to deal with.

The agency added that the neutral zone is another potential source of production capacity additions, but operational challenges face any serious development. For the joint fields, whose operation was only resumed in 2020 after a hiatus that lasted more than 4 years, indicating that Kuwait faces the possibility of falling behind its regional counterparts when it comes to the energy transition period. During the COP 28 climate talks in Dubai, Kuwait said that it will not support a decisive text calling for the gradual elimination of fossil fuels, and OPEC Secretary- General Haitham Al-Ghais also urged producers not to support the text in a message he addressed to its members during the climate negotiations.

The UAE consensus that was eventually adopted called for countries to transition away from fossil fuels and triple renewable capacity, something that does not exist in Kuwait. During a comprehensive overhaul of the strategy announced in October Kuwait Petroleum Corporation has outlined plans to develop technology, including the use of carbon capture and storage, as part of goals to reach net greenhouse gas emissions in Scopes 1 and 2 by 2050. KPC is studying the issue of green hydrogen. Second-generation biofuels, renewables, storage, recycled plastics, energy efficiency, retail, and carbon offsetting are part of its strategy, but it has not set specific plans and timelines.

Independent oil analyst Kamel Al-Harami said that Kuwait needs to develop green hydrogen and carbon capture. It should be noted that Kuwait reviewed its plans for crude oil production capacity in October, with the aim of reaching 4 million barrels per day by 2035, in addition to two billion cubic feet per day of non-associated gas by 2040, and capacity additions will come from its domestic fields as well as the neutral zone it shares with Saudi Arabia. The country’s declared production capacity is 2.9 million barrels per day of hydrocarbons, while the restricted production due to OPEC+ cuts reached about 2.55 million barrels per day last November, according to the latest survey conducted by Platts, affiliated with Standard & Poor’s.