Aug.
2001 Vol. 222 No. 8 International Outlook
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MIDDLE EAST
Dr. A. F. Alhajji, Contributing Editor,
Boulder, Colorado
Kuwait
A power struggle between the National Assembly (the
parliament) and the central government over who controls the oil wealth has delayed the investment of
international oil companies (IOCs) in the northern fields for the last two years. One foreign investment
opponent summed up the opposition view by saying, "It is a deal to sell Kuwait." The dispute
prompted the appointment of a non-royal family member, Adel Al-Subaih, as oil minister in February.
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The $7-billion "Project Kuwait" in the
northern sector will expand output from seven oil fields to 1.41 MMbpd from 621,000 bpd, while boosting
reserves to 17 billion bbl from 11 billion bbl. Officials kick-started the project by short-listing eight
companies, offering access to classified information by opening "data rooms" and battling the issue
in the National Assembly. Kuwait Petroleum Council, reconstituted in August 1999, short-listed eight IOCs as
potential operators for a northern fields consortium: Chevron, Conoco, ExxonMobil, Texaco, TotalFinaElf,
Shell, BP and Eni.
For the second year in a row, well blowouts, refinery
explosions and fires marred Kuwaits higher oil revenues. A well blew out last April in the northern
field of Mutriba, and well control specialists Boots and Coots were called for assistance. Press reports
indicate that Kuwait paid over $8 million to control the blowout.
Exploration. Kuwait Oil Co. (KOC) discovered a
200-million-bbl, light crude oil reserve (44°API) in the northern territory last November. It is in
Sabriyah field, in northeastern Kuwait. This new discovery has the potential to produce 15,000 bopd and 45
MMcfgd.
Drilling / development. The number of wells
drilled increased 39% last year. The total includes 128 oil producers and 10 service wells. The outlook for
2001 calls for a level similar to 2000.
After years of delays, Kuwait commissioned Gathering
Centers 27 (190,000 bopd, 26,000 bcpd and 98 MMcfgd) and 28 (210,000 bopd), the largest of their kind. These
centers were built as part of a plan to boost production capacity to 3 million bopd by 2005.
In February, Kuwait short-listed five U.S. firms to
compete for an engineering / procurement / construction contract for new storage facilities at Ahmadi. The
$900-million project should go for bid by September and take about three years to complete.
Production. Kuwaits oil output, exclusive
of its 50% share (315,000 bpd) of the Neutral Zone, averaged 1.67 MMbpd, up 4% from 1999s figure.
Although Kuwaits production varied according to changes in its OPEC quota, the country said last
September that it could not meet its quota, when OPEC raised the figure by 64,000 bopd. However, recent
reports indicate that Kuwait is now producing above its quota.
In May, Italys Snamprogetti, a unit of Eni, was
awarded a $55.21-million gas lift tender to enhance oil production in northern Kuwait. The project involves a
new high-pressure gas distribution network to 72 wells designated for gas lift operation.
At the end of 2000, Kuwaiti oil reserves stood at 96.5
billion bbl, of which 55 billion bbl were in Burgan field, the worlds second-largest oil field. Kuwait
has 11 onshore and three offshore fields. Gas reserves stood at 52.6 Tcf.
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