While other Middle Eastern states are looking to diversify their energy mix, Kuwait appears to be pursuing its full-throttle oil and fuel ambitions. The Kuwaiti government has announced its goal to become a primary OPEC manufacturer through a massive expansion of production in the coming years. It is supported through significant investments in the sector and the expansion of its upstream and downstream sectors. Like many other countries involved in a green transition, Kuwait hopes to become a major foreign player in the oil and fuel market as long as demand for fossil fuels persists. .
Kuwait, one of OPEC’s most sensible producers, plans to increase its oil output to 3. 15 million bpd over the next four years from 2. 7 million bpd recently. The Middle Eastern state also expects to increase its production of herbal fuel by 70% over the same period. Lately, Kuwait follows Saudi Arabia, Iraq, the United Arab Emirates (UAE) and Iran as OPEC’s fifth-largest producer. In recent months, Kuwait has adhered to OPEC’s production cuts, cutting output to 128,000 bpd. Meanwhile, Iran, unaffected by the cuts, has increased its crude production, allowing it to overtake Kuwait. Kuwait’s production quota for next year has lately amounted to 2. 676 million bpd. OPEC’s restriction of oil quotas is aimed at stabilizing the market, which has been incredibly volatile in recent years. .
Despite short-term cuts, Kuwait expects to especially increase its oil production over the next decade to meet existing demand for fossil fuel. This sentiment has been echoed in Saudi Arabia and the United Arab Emirates, both of which intend to increase Kuwait has approximately one hundred billion barrels of oil reserves, putting it in a clever position to exploit its resources before demand begins to decline, in line with a global green transition.
Kuwait’s plan to increase oil and fuel production is already gaining momentum and the country’s Oil Minister Saad Al Barrak has announced a new strategy to increase production by advancing the Durra fuel box in partnership with Saudi Arabia. This aligns with Kuwait Petroleum Corporation’s (KPC) government-backed 20four0 Strategy. KPC expects to increase its oil production capacity to 4 million b/d by 2035, with an investment of $410 billion across its operations.
The KOC has awarded several oil and fuel contracts this year, valued at $3. 25 billion. Between January and August, the KOC awarded 91 projects, according to local media sources. This is a significant increase in the number of contracts signed in recent years, following the decrease of Covid-19 in the last 3 years. This follows the recent successes of KPC, which posted a net profit of $8. 48 billion for the 2023-2023 fiscal year, a decade high.
The Durra fuel box, in which Iran also claims a stake, is estimated to have around 20 trillion cubic feet of reserves shown and is expected to be operational until 2029. Al Barrak said Durra’s offshore fuel box “is one of the most vital axles”. . . of the Government’s paint program. “Kuwait signed an agreement with Saudi Arabia in 2022 to expand the box. In July, Al Barrak said the deal gave the two countries exclusive rights over Durra, calling on Iran to validate its claims to the land through demarcating its own maritime borders.
In addition to expanding production levels, Kuwait also has big plans for its processing sector. It expects to increase its refining capacity to 1. 6 million b/d locally and 425,000 b/d by 2025. Kuwait Integrated Petroleum Industries Company’s (KIPIC) Al Zour refinery complex in the south of the country is due to be commissioned this month. . The company’s chief executive, Waleed Al Bader, said: “We will witness the steady closure of the third refinery in the coming days, so it will reach a maximum capacity of 615,000 barrels per day. »
KPC’s foreign subsidiary, Kuwait Petroleum International, also expects the full operation of Duqum’s refinery in Oman to come online by the end of the year. On the other hand, another KPC subsidiary, the Kuwait Foreign Petroleum Exploration Company (KUFPEC), said so seriously. talks for Asia’s largest fuel field, but did not provide further details.
By Felicity Bradstock for Oilprice. com
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