The Petroleum Economist GCC Energy Strategy Forum
2030 KPC Strategy: are we ready for the future?
25th January 2016
JW Marriott Hotel, Kuwait
Very warm greetings to all of you this morning
It is my pleasure to welcome all of you, here, today, to the third Energy Strategy Forum.
Low oil prices have been a prominent feature of the market; hence, volatility will prevail in the medium term, and it is only legitimate to ask whether KPC is ready for the future.
We, at Kuwait Petroleum Corporation, recognize that it is essential to make investments now, as an enabler to ensure a competitive, flexible and better position for Kuwait in the future.
The Kuwaiti oil sector's strategic direction to 2030 covers a spectrum of various functional areas, and provides a clear road map to support the oil sector.
We anticipate expenditure of 35 billion Kuwaiti Dinars over the next five years starting from 2017/2018, of which 59% is committed to specific identified projects.
Exploration and Production constitute 68%, while Refining and Petrochemical projects constitute 31.
The development of Heavy Oil is an integral part of our strategic vision and plans.
Kuwait is investing a total of 6 billion US Dollars in the First Phase of the upstream development of its unexploited reservoirs of heavy crude.
The aim is to target 60,000 barrels per day by 2018/19, and then triple that level by 2030.
Assistance from Major International Oil Companies is important to support Kuwait in delivering projects and meeting strategic targets, and attending to lowering unit cost.
The development of the Heavy Oil reservoirs located in North Kuwait, as well as the implementation of enhanced oil recovery projects in several existing reservoirs, and the development of non-associated gas, certainly require the application of advanced technologies never previously used in Kuwait.
The Enhanced Technical Services Agreement signed with SHELL for Heavy Oil, and the other one that is signed with BP for Greater Burgan, will promote the availability of skills, knowledge and experience to tackle the technological and operational challenges ahead.
Furthermore, it is worth highlighting the importance we provide to our Human Resources in the plans and development of heavy oil and other new fields.
Today, KPC is widely recognized as one of the top ten oil companies, and a leader in providing safe, secure and clean energy to the global markets.
We believe that investing in the expansion of petrochemicals is key to adding more value to Kuwait Hydrocarbons.
Kuwait's future focus will be to develop the Jurassic Gas and the petrochemical industry, where we plan to invest more time and efforts in order to benefit Kuwait economy.
We plan to establish an integrated refining petrochemical at Al-Zour refinery, where the heavy crude oil will be processed.
Abroad, our plans are also proceeding to commission of the refining and petrochemical complex in Vietnam 2nd quarter 2017/2018.
This will certainly help secure markets for Kuwaiti Hydrocarbons.
Building downstream facilities targeting refining petrochemical integration and producing high-value environmentally clean products in Kuwait are also at the implementation phase.
We are proceeding with plans to enhance KPC's role in the oil industry, to be more effective in securing the supply of the world's energy.
Kuwait will definitely play a role in meeting future energy needs, targeting higher crude oil capacity as well as environmentally friendly refining products.
Global energy demand will rise, and meeting such demand will require all sources of energy.
We believe that oil dependency within the energy mix will continue for a long time, even beyond 2030.
Other sources are picking up slowly because they started from a low base. Oil continues to play a huge role in Kuwait and in the world.
In conclusion, it is essential to highlight that the oil sector, which faces the future challenges of weak prices, is committed to fulfilling its role locally and globally in the most efficient and environmentally sound ways possible, and indeed, the strategic and commercially viable ways.
Furthermore, I wish to thank the organizers, "Petroleum Economist," for their dedication and efforts, which have enabled this event to be held for the third time in Kuwait.
I have no doubt that the discussions and deliberations today will be of great value to the oil and gas industry.
Thank you for your attention.