State-upstream operator, Kuwait Oil Company (KOC) is still awaiting approval for three new oil and gas production facilities planned for the north of the country.
KOC is expected to launch three tenders for the construction of new crude oil gathering centres, which could be worth as much as $1bn each, but requires approval from its parent company, Kuwait Petroleum Corporation (KPC).
Approval is expected imminently, but the project is still unlikely to be tendered until June, according to sources close to KOC.
“It normally takes another month from approval to the tender documents being issued by the CTC [Central Tenders Committee – the body which oversees Kuwait’s major public tenders]”, says one source.
The projects’ designs were completed in late 2011 and tenders had been expected in early 2012. The planned gathering centres in the north of Kuwait are numbered 29, 30 and 31. They will serve as a collection location for crude oil produced at several wells connected by flowlines, providing initial treatment through the separation of associated gas and removing salt.
While the projects are important to lifting oil production, KPC executives have raised concerns over Kuwait’s ability to meet its target of 4 million barrels a day (b/d), from around 3 million b/d currently.
KPC chief executive, Farouk al-Zanki and KOC Chairman Sami al-Rushaid have both said in the last few months, that the figure can be reached, but the target is likely to only be reached by 2030, missing the 2020 objective by a full decade.
Increasing production will require raising capacity at Kuwait’s existing fields, as well as developing new resources in the north of the country and stepping up exploration. Much of the increase will have to come from heavy oil sources, which KOC has little experience with. State-owned Kuwait Gulf Oil Company (KGOC) also hopes to raise output from the Divided Zone with Saudi Arabia.