Kuwait to add significantly to oil reserves

Kuwait expects to add a significant amount to its oil reserves by March 2011, some of it from the world’s second largest oilfield, Burgan, the chairman of the state explorer Kuwait Oil Co (KOC) said.

“More than big quantities will, God willing, enter the oil reserves by the end of the fiscal year (March 2011),” Sami al-Rushaid said at the Reuters Middle East Investment Summit in Kuwait on Tuesday.

Some of the addition will come from the country’s biggest oilfield, Burgan, which currently pumps 1.75 million barrels per day (bpd), he said.

Known as Greater Burgan, the oil field encompasses the Burgan, Magwa and Ahmadi fields. The field holds around 70 billion barrels, or around 70 percent of Kuwait’s 101.5 billion barrels of reserves, according to U.S. data.

The Gulf Arab state has had a reserve replacement ratio of 100 percent, since 1995 when it started the program, Rushaid said. He declined to give a figure for the reserves.

Kuwait’s plan to boost oil output capacity to 4 million bpd by 2020 is not expected to face major difficulties, he said.

The world’s fourth-largest oil exporter’s current output capacity of 3.3 million bpd is sustainable, Rushaid said, adding that Kuwait was complying with its OPEC quota of 2.2 million bpd.

Rushaid said KOC plans to spend up to 9 billion dinars ($31.90 billion), out of the country’s 30 billion four-year development plan which started this year. Up to 50 percent of the expenditure will go to drilling, he added.

“We now have 54 drilling rigs … and nine under mobilization … and the plan is to reach 84 (by 2015).”

The plan also includes building gathering stations and new pipelines to avoid residential areas, Rushaid added.

Kuwait is focusing on gas exploration more than oil, to meet growing domestic demand for electricity, he said.

Gas demand in Kuwait has outstripped supply, forcing the country to import liquefied natural gas (LNG).

Tight supply has been exacerbated by the OPEC-member’s adherence to the producer group’s oil output restrictions since late 2008. Most of Kuwait’s gas is a by-product of oil production, so when it pumps less crude it pumps less gas.

“We want to discover an additional 1.5 billion cubic feet of non-associated natural gas by 2030, and the indications are encouraging,” Rushaid said.

PROJECT KUWAIT

Project Kuwait, a multibillion-dollar plan to develop the country’s northern oilfields with the help of IOCs, will take a new form, and probably expand offshore, he said.
Parliament has opposed it for years, being against foreign companies getting a share of the oil wealth.

“Project Kuwait has a different concept now,” he said, adding that new models are being considered including enhanced technical service agreements with IOCs like the one it had signed with Royal Dutch Shell (RDSa.L)

In February, Kuwait signed a five-year service contract with Shell to develop pure gas fields in the north.

“We are currently talking to most of international companies,” he said, declining to name them.

He added that the scope of the project could expand to other areas including offshore exploration for gas.

Rushaid said that production from the northern oilfields will reach 880,000 bpd in two weeks, but the help of foreign companies and their technology were still needed.
Reuters