Sheikh Nawaf Saud Al-Sabah said in an interview in Kuwait that the state-owned Kuwait Petroleum Corp.’s upper arm saw the production of nearly 20,000 oil barrels a day on the Canadian gas shale gas project by the end of the year, out of 12,000 currently.
“It will increase to about 60,000 or more when we develop it fully, which will be in the mid-2020s,” he said. “We are beginning to understand its potential.”
In Australia, the company known as Kufpec gained exploration rights in three new blocks in February and April. He is producing nearly 40,000 barrels of oil a day in that country and intends to increase production and produce more liquid natural gas for export, Al-Sabah said, without specifying the targets.
Kuwait has planned to increase its global capacity to produce gas as well as oil. The Persian Gulf Member can currently pump as much as 3 million barrels per day from its wholly-owned areas, and the KPC aims at a daily capacity of 4 million by next year. As a member of the Organization of Petroleum Exporting Countries, however, Kuwait has pledged to capture its oil production, as the group seeks to balance the market and support the crushing.
Like many energy producers, Kuwait sees gas as crucial to future growth. Gas use is seen to be faster than demand for oil and coal, while policies shift to low carbon emissions. The amount of new investment in gas production capacity this year can set a record, according to consultant Wood Mackenzie Ltd..
In Alberta, Canada, Kufpec plans with his joint partner Chevron Corp, to begin developing the Waskahigan and East Kaybob areas, drilling the first of more than 370 wells over the course of 10 years. Fields are part of the Kaybob Duvernay project that produces bottled gas and natural gas juices.
“We continue to look at gas prospects in Australia,” said Al-Sabah. Kufpec has collaborated with Woodside Petroleum Ltd. in one of its blocks there, and the Al-Sabah company is exporting gas through the Woodside’s Wheatstone LNG facility. Kufpec sells half of its output from there under long-term deals.
“The other half is sold with a vacation clause that allows us to take those molecules in Kuwait if and when we need it,” he said. “Right now the LNG market is essentially a buyers’ market, so it makes no sense for us to break a long-term contract” just to sell the KPC when it can win competitive prices elsewhere, he said.
LNG manufacturers are afraid that a massive construction of new export projects, which began a decade ago, will exceed the growth in consumption and leave loads in search of homes. Domestic prices have already fallen since last fall and are at a large discount for LNGs sold in long-term contracts and associated with oil.
Kufpec, officially known as Kuwait Foreign Petroleum Exploration Co., can supply the KPC when the global market is strengthened, perhaps by mid-2020, Al-Sabah said.
More from the interview:
The company has total assets of 3.4 billion dinars ($ 11.2 billion) and is now well-funded for its current plans
“We need one or two more strategic purchases over the next two years to close our strategic gap”
Kufpec currently pumps 120,000 barrels per day of oil equivalent and plans to reach 150,000 by 2020
She wants to help capture the “excellent” shale gas reserves at one point./Investing.com