Explosion slashes Kuwaiti oil production

08 February 2002

A major explosion at the Rawdhatain oil field on 31 January reduced Kuwait's oil production by about 600,000 barrels a day (b/d) - nearly 30 per cent of its OPEC-mandated quota of 1.74 million b/d. The explosion, caused by a leak in a main oil pipeline, destroyed gathering centre (GC) 15, gas booster station 130 and a 132/11-kV substation at Rawdhatain. The incident is the second major blow to the Kuwaiti oil sector in 18 months. In mid 2000, an explosion ripped through the Mina al-Ahmadi refinery, causing some $330 million-worth of damage (MEED 7:7:00).

The fire not only knocked out production capacity at the 280,000-b/d GC 15 and the 204 million-cubic-feet-a-day gas booster station 130. It also cut power supplies to the 120,000-b/d GC 23 and 200,000-b/d GC 25, forcing Kuwait Oil Company (KOC)to halt its operations in the northern oil fields. KOC said in a 2 February statement that it would up output from the three onshore fields of Burgan in the southeast, and Minagish and Umm Gadr in the west, to make up for some of the losses. The remainder would be covered by stockpile drawdowns.

'Our stockpiles have reached 14 million barrels, enough to cover the production losses for 18-25 days,' Oil Minister Adel Khaled al-Sabeeh, told the official Kuwait News Agency, Kuna, on 3 February.

Traders confirmed that, in the five days following the explosion, there was little disruption to crude exports. 'There has been no cancellation in the lifting of crude from the Mina al-Ahmadi oil loading terminal,' said a Dubai-based oil trader on 5 February. 'Until now, we have not heard of a force majeure being issued.'

Kuwait Petroleum Corporation has set up a committee to investigate the cause of the accident. 'A loss assessment will be carried out in the coming few weeks. A plan will be put together to restart GC 23 and GC 25 and suggest means to recover the losses,' the KOC statement said. 'It is not possible to quantify at this stage the extent of the damage.'

Industry sources say that the three main facilities at Rawdhatain have suffered about 90 per cent damage. Initial losses are estimated to total at least $200 million.

Al-Sabeeh took responsibility for the explosion, submitting his resignation to Crown Prince and Prime Minister Sheikh Saad al-Abdulla al-Salem al-Sabah on 3 February. However, there was still no news on 6 February as to whether his resignation had been accepted.

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