EXCLUSIVE: Repairs underway at Divided Zone oil field

06 August 2018
Kuwait is planning to issue requests for quotations on machinery parts next week

Repairs to equipment and facilities at the Khafji oil field, which lies in the Divided Zone shared by Kuwait and Saudi Arabia, have begun as the two countries prepare to bring production from the field back online.

The national oil company, Kuwait Petroleum Corporation (KPC), has already informally started to discuss the procurement of machinery parts with companies, according to industry sources. Formal requests for quotations (RQs) for parts and materials are expected to be issued next week.

“The soft opening has already taken place,” said one source. “The project has had the green light from both stakeholders in Kuwait and those in Saudi Arabia.

“As the field has been inactive for such a long time significant work is needed to bring it back online.”

Production was halted at the Khafji field in October 2014. The stoppage was officially blamed on technical problems, but many industry insiders blamed a political spat between Saudi Arabia and Kuwait.

The Wafra field is also located in the Divided Zone and stopped production in May 2015 as contractors struggled to secure work and equipment permits.

If oil activities restart in the Divided Zone it could add hundreds of thousands of barrels a day (b/d) to global production, at a time when the US president Donald Trump is urging its allies in the Middle East to increase production in order to lower global oil prices.

The return of oil activities in the region could also see the revival of projects worth billions of dollars.

The stoppage of oil activities in the region forced the cancellation of a planned field development project called Wafra Joint Operations Heavy Oil, which was cancelled before the front-end engineering and design (feed) was completed. The project was being developed by Chevron in cooperation with Kuwait Gulf Oil Company (KGOC).

The first phase of this project was estimated to be worth $5bn and had a planned design capacity of 100,000 (b/d).

Another scheme that was being developed jointly by Chevron and KGOC, known as the Central Gas Utilisation Project, was also cancelled due to unresolved operational issues.

This project was estimated to be worth $1bn and would have collected gas that was flared at the Wafra Field.

In July SNC-Lavalin Engineers and Constructors, a subsidiary of Canada’s SNC-Lavalin, signed a new five-year framework agreement to provide International General Engineering Services to oil assets in the Divided Zone.

The contract was awarded by Al-Khafji Joint Operations (KJO), a joint operations company between Aramco Gulf Operations Company and Kuwait Gulf Oil Company.

The scope of the new framework agreement is to provide engineering services to assist KJO with its projects, including new offshore platforms, jackets and sub-sea pipelines as well as upgrades to existing offshore platforms and jackets, onshore crude and gas handling facilities, gas pipeline networks, utilities, waste water treatment facilities, and instrumentation systems.

SNC-Lavalin’s team are based in Houston, Texas and Al-Khobar will carry out the work, supported by SNC-Lavalin’s global centres of excellence in London, Calgary and Mumbai.

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