KUWAIT CITY // Kuwait is hoping to lure foreign petroleum companies back to its oil sector after years of restricting their involvement to limited contract work.
The emirate aims to boost its production capacity to 4 million barrels per day (bpd) by 2020 from an estimated 3.4 million bpd at present, including output from the "divided zone" it shares with Saudi Arabia, said Farouk al Zanki, the chief executive and deputy chairman of state-owned Kuwait Petroleum Corporation (KPC).
To achieve that, the company will need to develop partnerships with international oil companies (IOCs) to ease technology transfer, Mr al Zanki acknowledged.
"Partnering with IOCs is essential," he told an oil and gas summit in the Kuwaiti capital.
"Achieving our target will require large investments. KPC wishes to contribute to the future supply of international markets by continually investing in expanding its capacity."
Enhanced oil technology to boost output from mature oilfields will be especially important as KPC seeks to first increase then later maintain its output capacity over the next two decades, Mr al Zanki predicts.
"Production from existing reservoirs could be increased to a great extent, perhaps twofold," he said.
Sami al Rushaid, the chairman and managing director of Kuwait Oil Company (KOC), the oil and gas-producing unit of KPC, predicted at least a third of Kuwait's oil output in 2030 would come from enhanced oil recovery projects, about 20 per cent from as yet undiscovered oil deposits and an additional 8 per cent from the technically challenging exploitation of heavy oil deposits.
"Future oil production will be dominated by 'difficult oil'," he said. "Kuwait is no exception to that trend. The difficult oil, of course this is the area for which we are seeking partners. "These are the areas that are rather new to us, so these are the areas in which we will be seeking international alliances."
Kuwait's constitution does not allow its government to offer direct oil concessions to foreign companies. For years, that has held back KPC's efforts to boost production capacity in the emirate, which has the world's fifth-largest proved oil reserves.
Recently, the state petroleum company has developed an "enhanced technical services" contract model designed to be more attractive to foreign oil companies than its earlier contracts.
The test case for the new model is an agreement that KOC and Royal Dutch Shell signed a year ago for a complex project to develop deep sour-gas fields in northern Kuwait. Those fields now pump about 150 million cubic feet per day of gas, which KOC hopes to quadruple by 2013.
"Kuwait has found a way forward," said Dr Alirio Parra, a senior associate of the conference organiser CWC Group and former energy minister of Venezuela. "It's really a first for Kuwait."
Kuwait is the only GCC country with an elected parliament, many members of which have in the past taken the view that KPC should develop the emirate's oil resources alone, thereby reaping 100 per cent of revenue from crude production.
Divisions between Kuwait's appointed cabinet and its parliament have led the government to resign six times in as many years, most recently last Thursday.
tcarlisle@thenational.ae