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MEOG Commentary MEOG
to production.
On September 5, uK-based Oil Plus
announced the award of a contract by KJO to carry out water-injection compatibility studies and engineering work.
Wafra
The status of thornier negotiations on the onshore PNZ, and its producing Wafra field, remains unclear. e eld also has a capacity of around 250,000 bpd
Saudi’s share is controversially operated by the uS’ Chevron, the only foreign oil com- pany granted such upstream rights by either government.
e uS major shut down operations in mid- 2015 on the grounds of frustration of the rm’s work by the Kuwaiti authorities, allegedly born of long-standing pique at Riyadh’s renewal of the uS company’s concession in 2009.
is was compounded by a dispute that had erupted two years previously over land leased by Saudi Arabia to Chevron in the Al-Zour area, where a multi-billion dollar integrated down- stream hub is under development by KPC. Kuwait has long been particularly sensitive about the notion of foreign oil companies producing domestic resources.
Key to production plans
Official statements on a restart have hitherto come almost entirely from Kuwait. e smaller state is by far the needier of the two, with mini- mal spare capacity beyond the 3.1mn bpd avail- able from domestic onshore elds.
e country has a long-stated goal of raising
oil production to 4mn bpd by the end of 2020, and with only 3.65mn of this is due to be pro- duced onshore, the restart of output from the PNZ is vital for the target to have any chance of being realised. As a result, Kuwait has been looking for new ways to boost its oil capabilities, having recently enlisted Halliburton to explore its limited maritime area.
Kuwait Oil Co. (KOC), the domestic upstream operating arm of Kuwait Petroleum Co. (KPC), has been promising to start drilling o shore for many years, with separate surveys completed by Canada’s Sander Geophysics and China’s BGP during the rst half of the decade. Announcing the Halliburton deal, KOC CEO Emad Sultan said that the campaign would add 100,000 bpd to Kuwaiti production.
While to Aramco bringing 250,000 bpd of production capacity back into play would likely have a negligible impact in the short term, it ts well within the company’s stated ambition of maximising upstream capabilities so as to ease the burden of more mature, producing assets.
ese capabilities will also be included in the documents prepared ahead of Aramco’s planned initial public o ering (IPO), just as they were highlighted in the international bond prospec- tus, which was launched earlier this year, o ering unprecedented detail on the company’s nances.
With Iranian exports continuing to have nowhere to go but down and concerns about Venezuela unlikely to be reconciled, a poten- tial PNZ “good news” story could also serve to placate markets, so as not to deviate too far in either direction from the OPEC-mandated out- put levels.
Week 31 06•August•2019 w w w . N E W S B A S E . c o m P5
