Kuwait in Talks With 5 Oil Majors to Develop Fields

Kuwait in Talks With 5 Oil Majors to Develop Fields
Kuwait in Talks With 5 Oil Majors to Develop Fields

Kuwait is in talks with five major oil companies to help boost crude production and develop some of its oilfields including Burgan, the world’s second largest, a move that has faced fierce political opposition in the past.

Kuwait has invited Britain’s BP, France’s Total, Royal Dutch Shell, ExxonMobil and Chevron, to bid for a so-called enhanced technical service agreement for the northern Ratqa heavy oilfield, Hashem Hashem, chief executive of state-run Kuwait Oil Co. (KOC) told Reuters last week.

 “We are trying by first or second quarter of next year to conclude this contract,” Hashem said.

The plan is part of efforts to meet Kuwait’s target of producing four million barrels of oil per day (bpd) by 2020. The OPEC member currently produces around three million bpd and exports around two thirds.

KOC also plans to open up other oilfields such as its North Kuwait fields and areas of the giant Burgan field for foreign oil companies to develop, and will send a letter to the five majors seeking their interest in bidding, Hashem said.

  Political Opposition

It is the first time KOC will develop such a big heavy oil reservoir and the plan is to produce 60,000 bpd from Ratqa, which lies close to the Iraqi border, by 2018-2019 in the first phase, and then ramp it up to 120,000 bpd by 2025.

North Kuwait now produces around 700,000 bpd and the plan is to boost its output to one million bpd by 2017-2018, he said.

KOC is also working to sustain current production potential of 1.7 million bpd from Burgan after moving ahead with a water injection project to help boost oil recovery rates.

Kuwait’s oil production comes mainly from a few mature fields, dominated by the Burgan field in the south of the country. Kuwait’s current capacity is around 3.25 million bpd, with KOC’s share at around three million bpd. To bring the capacity up to four million bpd by 2020, KOC will contribute an extra 650,000 bpd.

Service contracts stay within the limits of Kuwait’s constitution, which ban foreign firms from oil production in the Gulf OPEC crude exporter. Exxon Mobil, Chevron and BP have all previously discussed technical service agreements with Kuwait.

Total had looked at working with Kuwait on enhanced oil recovery. Exxon signed a preliminary deal in 2007 to work on heavy oil in the country’s north. BP has looked at working in the west, while Chevron has looked at the south and east.

But political opposition to foreign firms taking a role in production had delayed oil developmental projects for years. Parliamentary criticism led Kuwait to cancel billion-dollar petrochemical and refining deals.