Kuwait Oil signs drill deals worth $440m in February

21 February 2010

Deals are part of plans to increase oil output to 4 million barrels a day by 2020

Kuwait Oil Company (KOC) awarded contracts worth more than $440m for the supply of 12 oil drilling rigs in January, company records show.

The deals were awarded to Chinese state refiner China Petroleum and Chemicals Company (Sinopec) and the local Burgan Company for Well Drilling, Trading & Maintenance.

Sinopec’s deal covers the supply of six 750 horsepower (HP) rigs for workover operations, where existing oil wells are drilled to boost production. The contract, which was signed on 3 February, is worth KD68.91m ($238.98m), KOC records show.

Burgan’s deal was also for six rigs, of 550HP, again for workover operations. The contract was signed at the same time as Sinopec’s, and is worth KD58.5m ($203.01m).

KOC declined to comment on what fields the rigs were to be used on. The deals are to first major contracts for drilling provision or services the company has awarded in 2010 after signing contracts worth hundreds of millions of dollars in 2009.

The contracts are part of the company’s scheme to boost overall oil production capacity in the hydrocarbon-rich emirate from current levels of around 3 million barrels a day (b/d) to 4 million b/d in 2020.

Contractors working in the emirate tell MEED that they expect KOC and its parent company Kuwait Petroleum Corporation (KPC) to be more aggressive in tendering new oil and gas deals in 2010 as the country’s government becomes increasingly confident in its ability to push through new major projects.

KOC signed a new enhanced technical service agreement with UK/Dutch Shell Group on 17 February under which the energy major will help develop the country’s northern Jurassic gas fields (MEED 18:2:2010).

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