A unit of state-owned Kuwait Oil Company (KOC) will launch a tender later this year to build facilities to extract heavy crude at a cost of up to 1.2 billion dinars ($4.2 billion), its chief executive said. KOC, a division of Kuwait Petroleum Corp, also plans to drill 260 wells in the Gulf Arab state during the 2013/2014 fiscal year at a cost of 600-700 million dinars, KOC CEO Hashem Hashem said.
This is part of efforts to meet Kuwait's target of producing 4 million barrels per day of crude by 2020, he told reporters on the sidelines of an oil conference. The OPEC member currently produces around 3 million bpd and exports around two-thirds of that. KOC said last month it expects to produce far less heavy crude from the Ratqa field and less light oil from the Jurassic field by 2020 than originally hoped and avoided questions about its 2020 production target.
Kuwait is also considering building a petrochemicals complex alongside a planned new refinery in order to boost the project's income, the chief executive of Petrochemical Industries Co (PIC) said. Asaad al-Saad, CEO of the petrochemicals arm of KPC, told reporters that PIC was studying whether it makes sense to build the new Al Zour refinery and a petrochemicals plant at the same time.
The studies are expected to be finished by the end of the year, he said, adding that a stand-alone refinery project would have only "modest" profits. Kuwait attempted to expand its petrochemical sector several years ago through a joint venture with Dow Chemical Co but the project became a victim of the Gulf state's turbulent political environment and it was scrapped.
Kuwait paid Dow $2.2 billion in compensation earlier this year for pulling out of the project. It also shook up the management of its state oil divisions, saying it needed to inject new blood into a sector which brings in almost all of the country's revenues.
It is expected to spend around 4 billion dinars on building the Al Zour refinery which will be Kuwait's fourth and could become the largest in the Middle East when it is built. British engineering company Amec was awarded the project management contract in December but it is unclear when construction will begin.
The refinery is one of several large infrastructure projects in Kuwait's 30 billion dinar ($106 billion) economic development plan which was announced in 2010 but has faced delays due to bureaucracy and political infighting.