Energy
From The Report: Kuwait 2016
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A founding member of the Organisation of the Petroleum Exporting Countries, Kuwait and other members together hold over 80% of the world’s proven oil reserves, of which Kuwait has 101.5bn barrels, or 6%. After the Second World War its role in newly global energy markets gradually increased, with production growing to 1m by 1955. Following independence in 1961, the country spent two decades bringing its energy resources under the government’s purview by acquiring shares in oil operations. In 1980 the authorities founded Kuwait Petroleum Corporation (KPC) to bring all state-owned oil operations under a single organisation. In the resulting structure, KPC manages the sector through its subsidiaries, which handle upstream, downstream, transport and petrochemicals operations. The Supreme Petroleum Council meanwhile is charged with overseeing all oil-related decisions, and the council includes the ministers of finance, oil, foreign affairs, and commerce and industry, as well as the state minister for Cabinet affairs.

This chapter contains interviews with Mohammad Ghazi Al Mutairi, CEO, Kuwait National Petroleum Company (KNPC); and Jamal Jaafar, CEO, Kuwait Oil Company (KOC).

Articles from this Chapter

Overview

Full steam ahead: Government and energy stakeholders are forging ahead with investments
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Prior to the 20th century, Kuwait’s merchants and pearl divers leveraged the country’s location to offer their wares on trade flows connecting British India with the Ottoman Empire’s Arabic-speaking realms. The 1938 discovery of oil in the Burgan field did not disrupt those trade flows but replaced their cargoes with oil, which became the country’s strongest economic driver. While government planners aim to diversify Kuwait’s economy, oil is still king. Even after oil and gas prices tumbled…

Interview

Strength under pressure: OBG talks to Mohammad Ghazi Al Mutairi, CEO, Kuwait National Petroleum Company (KNPC)
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Interview:Mohammad Ghazi Al Mutairi How are lower oil prices impacting the downstream segment in Kuwait? MOHAMMAD GHAZI AL MUTAIRI: As in any other predominantly oil-based economy in the world, lower oil prices have impacted the overall state budget. KNPC, as a downstream arm of Kuwait Petroleum Company (KPC), handles crude processing at three refineries with a gas plant and liquefied natural gas (LNG) import facilities. KNPC does get the benefit of lower crude prices in its input cost; however,…

Analysis

Making the grade: Upstream and downstream investments are aimed at exploiting the country’s rich heavy oil deposits
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While generally well-endowed with oil of a variety of grades, Kuwait’s Greater Burgan field in the southeast is the world’s second-largest after Ghawar in Saudi Arabia. Consisting of the Burgan, Magwa and Ahmadi reservoirs, Greater Burgan makes up the lion’s share of Kuwait’s production, with average output of 1.1m-1.3m barrels per day (bpd), according to figures from the US Energy Information Agency (EIA). However, the area’s capacity has been as high as 1.7m bpd in the past. Through the…

Interview

Building capacity: OBG talks to Jamal Jaafar, CEO, Kuwait Oil Company (KOC)
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Interview:Jamal Jaafar What opportunities do the challenges of refining heavy crude and developing reserves present for the energy sector? JAMAL JAAFAR: Part of KOC’s strategic plan is to develop its huge reserves of heavy crude. The first phase of the development plan is aimed at building KOC’s technical capability to a production level of 60,000 barrels per day (bpd) in 2018. KOC is also developing another heavy oil reservoir, Um Niqa, which is being accelerated. The execution of this…

Analysis

Conserving resources: Policymakers are looking to reduce costs by encouraging efficient consumption and rationalising subsidies
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Across the GCC, spending cuts have come to the forefront of fiscal discussions as hydrocarbons exports continue to fetch lower prices on global markets, resulting in decreased revenues. Subsidies, in particular, have been on the chopping block. In January 2016, Qatar announced plans to raise petrol prices by 30% to help address its expected budget deficit of $12.8bn for the 2016 fiscal year. Its state fuel company, Woqod, correspondingly announced price hikes from $0.27 to $0.36 per litre of high-octane…

Analysis

Winds of change: New solar and wind capacity will move the country closer to its 2030 renewable generation goals
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The vast deserts of the GCC were often seen as obstacles to development in the past, preventing widespread cultivation, holding down population growth and hindering overland travel. The oil sitting beneath those deserts changed that view. Like its GCC neighbours, Kuwait relied on oil resources to fuel its rapid economic development in the 20th century. Looking ahead, officials are now interested in technologies that draw power from the deserts themselves. Kuwait’s deserts contain abundant solar…