Page 7 - MEOG Week 23 2022

MEOG FINANCE & INVESTMENT MEOG

KPC seeks loan to finance output expansion

KUWAIT STATE-OWNED Kuwait Petroleum Corp. Under the latest OPEC+ production agreement,
(KPC) this week told the country’s parliament its quota will increase to 2.768mn bpd in July and
that it remains in discussions with international August.
banks over a $1bn loan to support its oil and gas Meanwhile, plans were announced by the
expansion plans. MoO and KPC in October to raise the MSC to
The news comes around six weeks after local 3.5mn bpd by 2025 and 4mn bpd a decade later,
media quoted Japanese government sources as five years earlier than previous guidance.
saying that a memorandum of understanding KPC CEO Hashem Hashem said the firm’s
(MoU) would be signed between the two coun- upstream subsidiary Kuwait Oil Co. (KOC)
tries for Nippon Export and Investment Insur- would achieve the increase through work on
ance (NEXI) to provide insurance for $1bn of gathering centres, the expansion of water han-
finance. dling and water injection facilities as well as
Oil Minister Mohammad al-Fares told Par- upgrades to existing Jurassic production facil-
liament this week: “The Kuwait Petroleum Corp. ities and the addition of new production units
is currently negotiating with the Japanese export and wells.
credit agency to provide insurance cover for the He added that KOC would work with Saudi
financing that the corporation will obtain from Aramco to expand total oil output from the
a group of international banks, including HSBC shared Partitioned Neutral Zone (PNZ) to
and JPMorgan, with a value not exceeding $1bn 700,000 bpd by 2025. With such ambitious plans,
for a period of 13 years.” $1bn is unlikely to go far.
“It was found that there is a need to invest Indeed, KOC is understood to be preparing
large amounts of money in order for the corpo- the award of a contract for 10 oilwell pumps
ration to implement (its five-year) strategy and worth up to $485mn and the company is also
to maintain and develop production levels,” he considering 26 bids from international and local
added. companies for the provision of new 63 drilling
Kuwait produced at around 2.64mn barrels rigs for a period of five years. Valued at around
per day (bpd) in April, below its maximum sus- KWD1.4bn ($4.6bn), it will be one of KOC’s
tainable capacity (MSC) of roughly 2.7mn bpd. largest rig deals.™
POLICY & SECURITY

Saudi ready to ramp oil supply

to offset Russian losses: press

SAUDI ARABIA SAUDI Arabia has indicated to its Western allies prices,” one person briefed on Saudi Arabia’s
it is preparing to ramp up oil supply in the event thinking told the FT.
of a substantial drop in Russian flow as a result The kingdom believes that while the oil mar-
of sanctions, the Financial Times reported on ket is tight and this has led to high prices, there
June 2. are no genuine shortages, sources told the news-
The EU is set to reduce imports of Russian oil paper. But this could change as the post-coro-
and oil product supplies by around 90% by the navirus (COVID-19) economic recovery picks
end of the year under an embargo that has been up pace, particularly as major cities in China
adopted in its sixth set of sanctions. And the bloc reopen.
has also agreed with the UK to bar the insurance Relations between Saudi Arabia and the US
of ships that carry Russian oil within six months. have been tense recently, over the kingdom’s war
Western countries have put pressure on Saudi in Yemen and human rights abuses. But several
Arabia in recent months to ramp up supply to visits in recent weeks by a high-level US delega-
replace Russian oil and reduce prices, but so far tion, including White House co-ordinator for
the kingdom has resisted such calls. In their latest Middle East policy Brett McGurk and White
monthly meeting, however, Saudi Arabia and its House Energy Envoy Amos Hochstein have
OPEC+ allies agreed to boost output by 648,000 sought to achieve a rapprochement.
barrels per day (bpd) in July and by a similar These efforts have borne some fruit, with
amount in August, signalling that they are will- Saudi Arabia agreeing to shift its tone in order
ing to capitalise on Russia’s loss of market share. to calm prices, and offer reassurances that it will
“Saudi Arabia is aware of the risks and that ramp up oil supply if the supply crunch gets too
it is not in their interests to lose control of oil severe.™

Week 23 08•June•2022 www. NEWSBASE .com P7