Kuwait is looking to increase oil production to 4 million bpd by 2020 and maintain it through 2030.
Farouk Al Zanki, CEO of Kuwait Petroleum Corporation (KPC), said this in the opening session of Gulf Petroleum Conference and Exhibition 2012 titled ‘The integration of Gulf petroleum industry, prospects and challenges’ Monday at Hilton Hotel.
Zanki further noted that by 2030, Kuwait’s electricity demand in peak season will touch 24 GW. “We use oil for power generation, and in summer we use up 50,000 bpd for power generation.”
To ease the stress on liquid fuels, KPC’s plan is to increase the use of natural gas for power generation, which will be more economic and environment friendly.
The conference was held under the auspices of Oil Minister Hani A Hussain, who was unable to attend due to other engagements. In his message to the conference, the minister said the political upheavals in the region have placed greater stress on the country to ensure greater production to meet the global energy demand.
The minister underscored the importance of joint efforts between the GCC states to surmount the challenges in the region and limit the impact of the changes on the economy.
Kuwait will optimize the use of its oil resources for economic development and people’s welfare, ‘according to the vision of HH the Amir,’ Hussain noted.
Further he said that Kuwait’s oil sector is undergoing huge changes to rise to global expectations and maintain the country’s top position as an oil producer.
He named greater cooperation between the Gulf States as an important criterion to meet the global energy demand.
Environment and foreign investments will be other key areas of concern for the oil industry in the future.
The minister also touched on the importance of developing national manpower, by encouraging the employment of youth in the oil sector.
In the opening session of the conference titled Petroleum Industry Outlook: Future and Opportunities, Farouk Al Zanki, said GCC states account for 40 percent of the global oil reserves.
Gas production, however, in the GCC states, except Qatar is struggling to meet demand, he added.
Kuwait is struggling to bridge the electricity demand-supply gap, and plans to turn to natural gas to increase generation.
The natural gas production capacity in Kuwait is 1 billion scfpd, most of which comes from the Northern Oil Field, Zanki said. “Kuwait needs 4 billion scfpd.”
Kuwait has entered into international Service Technical Agreements to increase natural gas production by 2 to 3 billion scfpd in the near future.
In the long-term GCC states can address the supply-demand gap by raising prices, and focusing on alternative methods, Zanki said.
The CEO also considered the option of a regional power grid to meet the requirements of all GCC states. “For this we the national oil companies and regulators should work together.”
He stressed the importance of turning from liquid fuel to gas.
Natural gas plays a leading role in the future to manage energy and food resources.
To a question on K Companies’ ideas about alternative sources of energy, Zanki said fossil fuel will be the main focus for the next 25 years at least. “But there will be efforts to make it cleaner.
“Alternative energy sources like solar power are being considered now, and it is in its nascent stage.
“The K Companies have been upgrading their upstream technologies for better recovery. The global recovery average is 35 percent, and we are planning to increase it by 50 percent.”
In a reply, Zanki said that it would be a good idea to consider cooperation with Russia for a gas grid, as their peak season is winter, when it is low season for the region, and vice versa.
Abdullah Y. Bishara, the former Secretary General of the GCC and President of the Diplomatic Center for Strategic Studies, in his keynote address, gave a rundown of the seminal oil conflicts in history, starting from the October War in 1973, when UN witnessed a showdown between oil producers and consumers.
The GCC states slapped an oil embargo against the US to express its dissent over its foreign policies related to the war. “For the first time, oil was used as a tool to express anger.”
Bishara continued with history moving to Algeria President Bouari Boumedienne in the 1970’s when his country was a leading voice for a New International Economic Order and the Non-aligned Movement, and the conflicts between the North and South among oil producers.
Bishara was involved in the UN-initiated dialogue between the North and South. He marked the dialogue as the starting point of transnational companies having a greater say in the oil producing states.
After going through the history of conflict, Bishara said, “… we are now in a partnership stage between oil producers and oil consumers. We have to ensure good relations, stability and mutual respect.”Bishara noted that oil companies are very influential today and lobby in politics to get people elected into parliaments.
Abbas Al Naqi, Secretary General of Organization of Arab Petroleum Exporting Countries (OAPEC), was the second speaker in the opening session.
He said OAPEC accounts for 56 percent of the world’s total reserves, and 28 percent of the world’s total production.
18 percent of the world’s marketable natural gas comes from OAPEC.
OAPEC’s share in global oil production in 2012 is 58 percent, compared to 25 percent of non-Arab OPEC members.
OAPEC had 37 trillion sq meters of oil reserves in 2000, and now it has increased by 28 percent. OAPEC produced 21.5 mbpd in 2011, which is 31 percent of the global production.
Naqi said that despite OAPEC’s huge oil reserves, “our contribution is low.”
With regards to consumption of oil and gas, local consumption has increased in OAPEC to 6.5 bpd in 2011, he observed.
“This is due to increase in population, construction projects and economic growth.”
On oil and gas exports, Naqi said OAPEC exported 18.6 mbpd in 2000, which was 31 percent of total exports. “In 2010, OAPEC accounted for 36 percent of world exports.”
Talking about future, Naqi said OAPEC will strive to meet increasing demand, and that changes in world economy will be seen as opportunities.
“Between 2010 and 2030, global demand for oil will increase by 22 mbpd, while demand for gas will increase by 2 percent.
To meet this, OAPEC will increase production by 90 percent between 2010 and 2035.
Oil trade will increase to 42 mbpd by 2035, and Qatar will play a leading role in the sea transportation of oil. Middle East will maintain its share of 24 mbpd by 2030.
On the subject of new challenges, Naqi said climate change regulations will affect the rules of the game the most. Arab countries should stick to the international climate change protocols to reduce emissions.
Kuwait is mulling “many scenarios” in case the strategic Strait of Hormuz is closed, disrupting its vital oil exports, a top official said on Monday.
“We are discussing many scenarios but we have not decided which” plan to adopt, the CEO of national oil conglomerate Kuwait Petroleum Corp (KPC), Faruq al-Zanki, said without revealing specifics.
“This is something that needs to be coordinated with the (Gulf Cooperation Council) GCC states,” Zanki told reporters on the sidelines of a Gulf Petroleum Conference.
Iran has frequently threatened to close the strategic strait, through where most Gulf oil exports pass, if it is militarily attacked over its controversial nuclear programme.
Zanki said KPC has been asked to look into this issue.
“KPC has been asked to look into what we think (it can do about the possible closure of Hormuz) and this is something we are looking into,” Zanki said.
He said that such contingency scenarios were discussed by the GCC states in the past and “we need to re-visit it and come up with a specific plan, agreed by all” states.
He declined to say if the GCC states were currently engaged in studies over the possible closure of Hormuz.
Kuwait pumps around 3.0 million barrels per day (bpd) and most of it is exported as crude and refined products through the Strait of Hormuz.
The United Arab Emirates is currently constructing pipelines that would allow oil and gas exports to bypass the strait, at the mouth of the Gulf.
In January, UAE Energy Minister Mohammad bin Dhaen al-Hameli said a Habshan-Fujairah pipeline, due to be finished by June, will have the capacity to pump 1.5 million bpd from fields in Abu Dhabi on the Gulf to Fujairah on the Gulf of Oman.
The oil-rich country is also working on a gas terminal in the northern emirate of Fujairah to eliminate the need for gas tankers to pass through the Hormuz.
Source: Arab Times