Kuwait to spend $90 billion on oil over 5 years

AFP, Monday 29 Nov 2010

Kuwait to boost on and offshore oil investments

OPEC member Kuwait plans to spend as much as 90 billion dollars on oil projects inside and outside the country over the next five years, a top oil executive said on Monday.
"About 90 billion dollars will be spent over the next five years to achieve our strategy," said Hashim al-Refaai, managing director for planning with Kuwait Petroleum Corp. (KPC), the emirate's national oil conglomerate.
More than a third of the amount is earmarked for two major projects to build a new refinery at a cost of 14 billion dollars and upgrading two existing refineries for 16.3 billion dollars, he told the 6th annual conference on Kuwait projects organised by MEED.
The two projects have been stalled by political disputes between MPs and the government over the past five years.
The 615,000-barrels per day (bpd) refinery project was scrapped by the government after awarding it to South Korean and Japanese firms due to protests by opposition lawmakers that its tendering did not go through the proper legal channels.
Faruq al-Zanqi, the CEO of the national oil company KPC, told reporters on Monday that he is hopeful the two projects will be tendered and awarded in 2011.
He said KPC is waiting for the Supreme Petroleum Council, the highest oil decision-making body, to meet and take a favourable decision on the two projects, insisting Kuwait needed them.
After completing the two projects, Kuwait plans to shut down Shuaiba refinery, one of three refineries in the country with a total capacity output of 930,000 bpd.
And when the two projects are operational, Kuwait will have a refining capacity at 1.4 million bpd.
Kuwait's expenditure plan in the oil sector which supplies 90 percent of public income, envisages raising oil output capacity to 3.5 million barrels of oil per day by 2015 from 3.1 million bpd currently, Refaai said.
The ultimate goal of Kuwait's long-term strategy is to raise its output capacity to four million bpd by 2020 and sustain that until 2030, Refaai, who is also chairman of Oil Development Company, said.
The chairman of Kuwait Oil Co. (KOC), a KPC subsidiary responsible for exploration and production, Sami al-Rasheed, told the conference the company expects to spend 25 billion dollars over the next five years on projects.
Rasheed said KOC aims to raise its crude output to 3.65 million bpd by 2020 from around three million bpd now. The remaining 350,000 bpd will come from the divided zone with Saudi Arabia.
KOC also plans to raise natural gas production, both associated and non-associated, to around 4.5 billion cubic feet (127 million cubic meters) daily by 2030.
Kuwait currently produces one billion cubic feet (28 million cubic meters) of associated gas and around 140 million cubic feet (four million cubic meters) of non-associated gas daily.
KPC transport subsidiary, Kuwait Oil Tanker Co. (KOTC) will account for 1.6 billion dollars to modernise the Kuwaiti oil fleet by ordering six new modern tankers by 2015, Refaai said.
Kuwait, OPEC's fifth largest producer, says it sits on 10 percent of the world's proven crude reserves and is pumping 2.3 million bpd.

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