Creativity needed to develop our oilfields
‘KOC on a standstill’
KUWAIT’S oil industry is neither short of money nor approvals at various levels. Nevertheless, it is stuck and cannot move forward or expand its crude oil production to a level above three million barrels per day. This is despite our huge reserve, which is certainly above 90 billion barrels. For some reason, the Kuwait Oil Company is just on a standstill.
What it needs is a new process that simply copies the previous numbers without any new approaches. Or it must simply plug in any figure as long as it is above three million so that it will be 3.5 million and eventually 4 million or 4.5 million in the coming years until 2035. The reality is not there, as Kuwait is behind the neighboring oil companies. Kuwait is the exception to its peers. Why are we behind the rest? What is the reason? Is it due to lack of professionalism or lack of foreign partnership? Or is it that we simply want to be in command regardless?
Our experience has been to keep a distance and not have full partnership or ask foreign oil companies to supervise oil exploration rather than just be the operator, thereby leaving the decision to Kuwait Oil Company, instead of holding them
responsible.
Currently, Kuwait is producing 2.329 million barrels per day, as imposed by OPEC Plus, and it will stick to this level by every barrel. It is well below our production level of three million, and the net export of crude oil is close to one million, as the balance is split between domestic consumption and meeting the need of local refineries for about 600,000 barrels per day. Therefore, one million barrels is not much volume to sell to various parts of the world, if we are to take into consideration the supply to our own joint-operation refineries in Oman, Vietnam and Italy. So in conclusion, there is not much volume of crude oil left to sell.
Of course, the upcoming relaxation of the restriction by OPEC Plus and the increase in production of 350,000 among all 23 members is expected. This will result in a small increase in production in the neutral zone of Khafji and Wafra oil fields, but will not add much to Saudi Arabia or Kuwait. So, the two fields will remain short and under-utilized for some time, if not for a long time to come.
In the end, whatever Kuwait is going through is surely a reflection of the overall situation with lack of focus, minimum work, and concerns, questions and interference from every part of the society, be it the government or the National Assembly.
So, no matter how much money we spend on our industry, we will be behind our peers. Thanks to our greater Burgan oil fields, which are still running strong after 75 years and providing Kuwait with over 65 percent of our daily oil production and daily cash flow.