Farouk Al-Zanki, CEO and deputy chairman of Kuwait Petroleum Corporation (KPC), has confirmed that Kuwait’s boosted oil production levels remain stable, as the country hopes to put a period of malaise in its oil sector behind it with ambitious upstream and downstream plans.
Al-Zanki, speaking at the Second Kuwait Oil and Gas Summit and Exhibition in Kuwait City, told reporters that Kuwait’s production level both helped to soothe oil markets and provide for future spending.
Confirming that January’s average daily output ranged “between 2.9 and 3 million barrels,” Al-Zanki said “current prices are suitable and helpful for Kuwait to pump more investments into the oil exploration and development projects. The costs of [our] exploration operation ran high, so the price hikes struck a balance between costs and revenues.”
Al-Zanki also reaffirmed Kuwait’s national production target of 4 million barrels per day by 2020.
Noting the persistence of high prices relative to underlying supply and demand fundamentals, Al-Zanki said “the State of Kuwait always seeks to maintain stability of the global oil market through insuring sufficient supplies.
He confirmed that KPC were in talks with French supermajor Total for a large refinery project in China, a key customer for Kuwait’s oil. CHina increased its Kuwait oil imports by over 50% in October, with Kuwait meeting over 6% of Chinese oil demand.
KPC is also looking to build new refineries in-country, upgrade existing facilities, and kick-start a petrochemicals development scheme.
Al-Zanki also said that Kuwait is working on a domestic gas supply program to end summer power cuts that for the last two years have sometimes left homes without air conditioning in 50 degree heat.
Currently Kuwait has to import LNG to meet gas demand in peak months, despite abundant non-associated gas and significant gas flows associated with oil production.
Without being drawn on specifics, Al-Zanki said that the State of Kuwait already has contingency plans in place should oil traffic in the Strait of Hormuz be disrupted. Kuwait currently ships almost all it’s exported crude via the Strait.
“Besides the already-set plan, there are also alternative plans for managing any crisis that could affect the oil exports stemming from the regional geo-political tensions as well as the domestic or external factors,” Al-Zanki said.
Oil & Gas Middle East is in Kuwait City for the Kuwait Oil & Gas Exhibition and Conference 2012.Â
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