Kuwait Petroleum Corporation (KPC) has formally announced the establishment of a new company to take over oil exploration and production in the Partial Neutral Zone (PNZ), after its current operator,Japan's Arabian Oil Company (AOC),surrenders its drilling rights. Kuwait Gulf Oil Company (KGOC) is 100 pent owned by KPC and will have capital of $330 million (MEED 5:10:01).
'The new company will be solely responsible for upstream assets in the PNZ, including full field development,' says a KPC official. KGOC will be under the operational command of Kuwait Oil Company (KOC). It will be headed by Mohammed al-Jassaf, the official Kuwait news agency (Kuna) says.
'A formal agreement will soon be in place and AOC will relinquish the concession in January 2003,' the KPC official says. 'We will sign a five-year TSA [technical services agreement].'
Under the deal, AOC has agreed to buy 100,000 barrels a day (b/d) of Kuwaiti crude for at least 20 years and provide capital investment for future development in the PNZ. AOC will also provide manpower, training and related services to KGOC.
AOC is the operator of the onshore Hout and Khafji fields in the PNZ under a 43-year-old concession agreement. The two fields produce a total of about 280,000 b/d.
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