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MEOG Commentary MEOG

bpd by the end of this year and to 4.75mn bpd by then see ratqa’s production lifted to 325,000 bpd,
the end of 2040, up from the current 3.1-3.2mn while the final phase envisages output from the
bpd. in late 2019, the 2020 target was reported to two fields totalling 430,000 bpd. Apparently una-
have been pushed back to 2040. shamed of the four-decade delay, a company offi-
However, positive news has come in the form cial was quoted noting that attempts had been
of output from the long-delayed Lower Fars ongoing to develop heavy oil at ratqa since 1979.
heavy oil project finally hitting the market in Meanwhile, Baker Hughes and Halliburton
recent months. Production from the develop- have also awarded rig contracts over the past 12
ment’s two fields – South ratqa and Umm Niqa months for efforts to increase production from
– has now reached a first phase plateau of 75,000 on- and offshore areas respectively.
bpd since it began in February. While the progress onshore appears to be
The broader ratqa asset was discovered in the broadly cheering for Kuwait, it remains to be
late 1970s, but efforts to develop the field have seen whether under current market conditions,
been largely stifled. plans for long-awaited offshore production will
Lengthy and ultimately fruitless efforts by gain much traction.
successive governments to persuade MPs to However, Al-Khafji offers Kuwait and Saudi a
allow KOC to enlist substantial iOC assistance relatively swift, and certainly cost-effective, addi-
were largely to blame for the delays, com- tion of 65,000 bpd each, with more to come. For
pounded by the notorious slowness of state Saudi, this increment will change little, but for its
decision-making across the board. The state northern neighbour, the increase is much more
upstream firm lacks experience of such challeng- meaningful.™
ing production.
However, in early 2015 the UK’s Petrofac was
finally awarded a $4.2bn engineering, procure-
ment & construction (EPC) contract to execute
the first phase of the so-called Lower Fars Heavy
Oil Project, calling for production of 60,000 bpd
by this year.
A multi-phase project aimed at pump-
ing more than 200,000 bpd by 2030 has long
been envisaged. However, the latest statement
stretched out the timetable to 2040 and also
covered the development of heavy oil at nearby
Umm Niqa.
By 2026/27, KOC aims to increase ratqa’s
output to 120,000 bpd, rising to 230,000 bpd by
2030/31, with production at Umm Niqa seen
climbing first to 50,000 bpd and then to 80,000
bpd over the same period. A fourth phase would

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