Jamal Jaafar, CEO, Kuwait Oil Company (KOC): Interview

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 phase in northern Kuwait is being done in parallel with the construction of the Al-Zour Refinery by the Kuwait National Petroleum Company.

Both projects present important challenges to our oil sector, and constant coordination is needed to ensure a complete success in ensuring they are commissioned by 2018. The heavy crude will be processed by the Al-Zour Refinery to produce low sulfur fuel oil, which is required to meet the increased demand for fuel from the power generation sector in Kuwait. On the technical side, our staff is going through intensive training in preparation for the operations involved in implementing the first steam injection project in Kuwait. In pursuing KOC’s objective of building up its capabilities in heavy oil, gaining the support of international oil companies (IOCs) is critical.

How is KOC contributing to the Heavy Oil Programme, and when are you expecting to see tangible benefits from this research?

JAAFAR: Extensive research and reservoir modelling have been taking place in the Heavy Oil Programme in order to ensure an optimal development and maximum oil recovery from the reservoirs. Several pilot projects evaluating cold production with horizontal wells, as well as enhanced oil recovery through steam injection in vertical wells, are currently in operation in the country, and are already providing valuable information that will help optimise operations once we start full-scale operations in 2018. The field will be developed through the application of cyclic steam injection in a first phase, and followed by steam flood in a further phase.

What steps has KOC taken to develop natural gas output, and which IOCs will you be working with towards this end?

JAAFAR: KOC is developing the non-associated gas reservoirs located in northern Kuwait, and the current production is about 175m standard cu feet per day (scfd). We are implementing a plan to expedite the development of north Kuwait’s Jurassic gas reserves, and we are expecting the non-associated gas production from this to increase to about 500m scfd, which will be in addition to the associated gas production of 1.5bn scfd.

As for IOCs, at present we are collaborating with Shell through an enhanced technical service agreement, and they have been providing excellent support. Such companies’ participation in the development of non-associated gas is one of the factors needed for success in reaching our target of 1bn scfd by 2023. IOCs are also helping to optimise the development plan and provide technical advice in the design of the gas facilities.

Under the Kuwait Development Plan 2015-20, up to $85bn is expected to be invested. In which areas are investments most needed?

JAAFAR: More than 50% of this capital budget is needed by KOC to grow its production capacity to 3.65m bpd by 2020. These will allow extensive drilling programmes and the construction of key facilities such as three gathering centres, a central production facility for heavy oil and the completion of the Wara Pressure Maintenance Project.