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MEOG PROJECTS & COMPANIES MEOG
Kuwait nears upper production limit
KUWAIT
OPEC+ is unlikely to be able to call on Kuwait for many more production increases as the country nears its oil output ceiling. Following the most recent meeting of OPEC and its oil-producing partners, Kuwait’s quota was set at 2.818mn bar- rels per day (bpd) for September, around 100,000 bpd higher than June production.
However, various outlets including the local Al-Qabas daily and S&P Global Platts have said that the country has just 30,000 bpd of produc- tion upside, including from the Partitioned Neu- tral Zone (PNZ) which it shares with neighbour Saudi Arabia.
The Ministry of Oil and state-owned Kuwait Petroleum Corp. (KPC) have been working toward reaching 3.5mn bpd by 2025 and 4mn bpd by 2035, having previously set a target of 4.75mn bpd by 2040.
However, with the flagship Greater Burgan oilfield – the world’s second largest – already requiring gas injection and water flooding to produce at 1.6mn bpd, around 95% of its poten- tial – even the revised timelines may be overly optimistic.
KPC’s upstream arm Kuwait Oil Co. (KOC) is seen achieving planned expansion through work on gathering centres (GCs), the expansion of water handling and water injection facilities as well as upgrades to existing Jurassic produc- tion facilities and the addition of new production units and wells.
Last year, KOC started up the last of three planned GCs, each adding 100,000 bpd of crude processing capacity alongside 62.5mn cubic feet (1.77mn cubic metres) of gas and 240,000 bpd of treated water.
GC-31 which was built by UK-based Pet- rofac is the third and final gathering centre to be installed under $2.2bn worth of contracts awarded by KOC in 2014. The GC-29 and GC-30 facilities were completed by their con- tractors – Dodsal and Larsen & Toubro, both based in India. Initially due for completion in 2018, all three fell well behind schedule. The GCs were valued at $641mn, $793mn and $754mn,
respectively. The midstream projects were due for completion in 2017 ahead of the scheduled commissioning of the first phase of the Lower Fars Heavy Oil project at the northern Ratqa field.
These GCs are key to Kuwait’s efforts to ramp up heavy oil production in the north of the coun- try. Heavy crude is produced under the Lower Fars Heavy Oil Project which comprises Umm Niqa and South Ratqa.
The broader Ratqa asset was discovered in the late 1970s, but efforts to develop the field were largely stifled until the UK’s Petrofac was finally awarded a $4.2bn engineering, procurement & construction (EPC) contract to execute the first phase in early 2015. This called for combined production of 60,000 bpd by last year.
Output from the two fields under the project reached a first phase plateau of 75,000 bpd fol- lowing the start of operations in February 2020.
Then in September 2021, KOC was reported to have cancelled a project to drill 11 wells as part of the country’s efforts to expand the production of heavy oil. The $400mn contract was reported to have already been awarded to an international company, but that it was yet to be signed.
According to KOC’s original plan, by 2026/27 output from South Ratqa would grow to 120,000 bpd, rising to 230,000 bpd by 2030/31, with heavy oil from the nearby Umm Niqa field seen climbing first to 50,000 bpd and then to 80,000 bpd over the same period. A fourth phase would then see Ratqa’s production lifted to 325,000 bpd while the final phase envisages output from the two fields totalling 430,000 bpd.
Construction is believed to be around 93% complete on the heavy oil facilities at South Ratqa with roughly 930 wells having been drilled to allow for increased production.
Meanwhile, total oil production from the Partitioned Neutral Zone (PNZ) shared with Saudi Arabia is also seen rising to 700,000 bpd by 2025, from around 250,000 bpd in late 2021, with output shared 50:50 between Kuwait and Saudi Arabia.™
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