Page 5 - MEOG Week 46 2021

MEOG COMMENTARY MEOG

Saudi Arabia’s Eastern Province via the 350,000 would reach 3.5mn bpd by 2025 and 4mn bpd
bpd A-B oil pipeline. a decade later, with the latter target brought for-
ward by five years.
Kuwaiti caution The move comes amid optimism from KPC
Kuwaiti Oil Minister Mohammed Al Fares this about the future of output from the partitioned
week repeated his country’s intentions to ramp neutral zone (PNZ) shared with Saudi Arabia,
up oil production, though he made some pre- though sentiment from the Saudi side appears
liminary comments about the country’s plans to to be less positive.
embark on the energy transition. Speaking to the official Kuwait News Agency
Until now, Kuwait has been the most hesitant (KUNA), KPC CEO Hashem Hashem said the
of the Gulf oil-producing nations on engage- company’s upstream subsidiary Kuwait Oil Co.
ment with renewables and lower carbon energy (KOC) would achieve the increase through work
sources. Speaking at ADIPEC, Al Fares said: “We on gathering centres, the expansion of water
looked at the transition issue in a way that we handling and water injection facilities as well as
need to make sure that we have to have a very upgrades to existing Jurassic production facil-
clear plan, deliverable, wise and, at the same ities and the addition of new production units
time, the economical factor is looked into.” and wells.
He added: “We are putting a plan right now KOC’s projects included “upgrading current
where we are trying to look at all different mix- Jurassic production facilities and [establishing]
tures. And we are starting, [since] everybody is two additional facilities to increase light crude
starting in this region with renewables related production. This plan will be implemented in
to solar.” Plans appear to centre around a 2-GW combination with an integrated drilling pro-
wind and solar project, which Al Fares said gramme of 500 wells per year on average and
would be tendered by the Kuwait Authority for around 2,000 wells workover,” according to
Partnership Projects and would take the form of KUNA.
a “joint venture between the government and the Hashem said the drilling campaign would be
private sector”. carried out using 71 drilling rigs and 62 worko-
He added: “Kuwait is not far away from what- ver rigs working across Kuwait.
ever you see in this region. But again, I want to Meanwhile, in September a company source
make sure that what we say is what we want to was quoted as saying that KOC would drill an
deliver.” extra 300 wells per year, taking the annual total
Noting that plans to develop renewables and to 700, as part of a $6.1bn capital expenditure on
hydrogen were part of a “parallel path”, Al Fares’ exploration activities over the next five years.
comments are noteworthy even if not particu- While the two states are separated by several
larly inspiring compared to the advanced and million bpd of oil production, their energy tran-
ambitious plans of some of its neighbours. sition plans both pale in comparison to those
of their ambitious neighbours. However, it is
Oil optimism illustrative of economic reality that as they take
In October, the Kuwaiti Ministry of Oil and steps towards a greener future, both countries
state-owned Kuwait Petroleum Corp. (KPC) remain focused on significantly increasing oil
said separately that Kuwaiti oil output capacity production.™

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