Kuwait tweaks oil production strategy

19 May 2015

Kuwait Oil Company looking to compensate for Divided Zone shutdown

  • Divided Zone production is expected to fall to zero over coming weeks
  • In October 2014, Divided Zone was producing about 550,000 barrels a day
  • Three major projects have been derailed in Divided Zone over past two years

State upstream operator Kuwait Oil Company (KOC) is looking to focus on high-production oil fields in order to compensate for lost production from the Divided Zone, shared by Kuwait and Saudi Arabia.

“Kuwait Oil Company is trying its best to concentrate on high production fields… to dig more wells in a bid to compensate” Jamal al-Loughani, head of marketing at Kuwait Petroleum Corporation (KPC), told reporters on 19 May.

KPC is a state-owned umbrella company that has authority over KOC.

Al-Loughani did not specify which regions would be focused on in the bid to ramp up production.

His statement comes after officials told MEED that KOC is mulling new offshore upstream developments as well as operations to ramp up production in the north of the country.

Divided Zone production is expected to fall to zero in coming weeks, after the US’ Chevron announced it was halting operations at Wafra, which is the region’s last functioning oil field.

The Wafra field development scheme is the third major project to be derailed in the Divided Zone in the past two years.

In August 2013, the Dorra gas field development scheme, which had an estimated budget of more than $2bn, was shelved.

This was followed by the closure of the 310,000-barrel-a-day (b/d) Al-Khafji oil field on 16 October 2014, which was shut on the orders of Saudi Arabia.

Both Saudi and Kuwaiti officials have denied that political problems are behind the shutdowns, but contractors speaking off the record have said the project disruptions are due to political issues that have their roots in a dispute over land use in the Divided Zone.

Before the closure of Al-Khafji in October, the Divided Zone was producing about 550,000 b/d, which was split evenly between Kuwait and Saudi Arabia.

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