Page 10 - MEOG Week 35 2022

MEOG PROJECTS & COMPANIES MEOG

Kuwait refuses to

extend gas contracts

KUWAIT KUWAITI authorities are reported to have related to the coronavirus (COVID-19) pan-
refused to extend gas contracts with local firm demic and political instability.
Spetco International Petroleum Co. and Schlum- The contracts for JPFs 4 & 5 cover the con-
berger of the US when they failed to complete struction of processing facilities and pipe laying.
projects on schedule. The wider project is expected to have a total
Sources were quoted by Kuwait’s Arabic lan- capacity of 100,000 barrels per day (bpd) of
guage Al-Rai as saying that the two companies light crude and 300mn cubic feet (8.5mn cubic
had failed to complete work on projects for state- metres) per day of gas.
owned Kuwait Oil Co. (KOC) on schedule and However, in July, KOC was reported to have
had requested an extension from the Central cancelled plans for JPFs 6 & 7, which had been
Agency for Public Tenders (CAPT). expected to cost a combined total of $1bn-2bn
The contracts cover the installation of pro- to complete.
duction facilities at the country’s northern Juras- “KOC decided to cancel those projects as
sic gas fields. part of spending rationalisation plans and opt
With Spetco and Schlumberger reported to instead for expansion of the existing facilities,”
have already paid penalties for their tardiness, one source was quoted as saying, noting that the
Al-Rai said that they had sought the extension projects were central to KOC’s target of achiev-
to avoid more fines. ing 950 mmcf (26.9 mcm) per day of free gas
“CAPT refused to extend the contracts for the capacity by 2023.
two firms, although part of the contract has not JPF-4 will be located near the Sabriya field in
been completed,” it reported. North Kuwait, with JPF-5 located around 10km
CAPT and KOC awarded the main contracts to the east.
for the Jurassic processing facilities (JPF) 4 & 5 in In October, the Ministry of Oil (MoO) and
November 2021 to Chinese company Jereh Oil KOC’s parent firm Kuwait Petroleum Corp.
& Gas Engineering Corp. and Spetco respec- (KPC) said the emirate would expand its max-
tively. Jereh’s winning bid was reportedly valued imum sustainable capacity for oil production
at $426mn, while Spetco’s was $398.2mn, both from the current 2.8mn bpd or so to 3.5mn bpd
around 14-20% below the level anticipated when by 2025 and 4mn bpd a decade later, with the lat-
bids were sought in Q3. ter target brought forward by five years.
While bidders were prequalified during Q2 Meanwhile, last week Minister of Oil Dr.
after the submission of the required $28mn Mohammad Al-Faris announced that the coun-
deposit, the increased competitiveness of the try had raised its oil production to 2.811mn bpd,
bids is thought to have stemmed from Kuwait’s in line with the quota attributed by the OPEC+
increased budget strain amid ongoing issues agreement.™

P10 www. NEWSBASE .com Week 35 31•August•2022