The cost of oil in recent years has created an enormous challenge for well-established oil and gas businesses, but there are one or two positive signs in the early weeks of 2017.
In March it was announced that state-owned Kuwait Oil Company (KOC), had signed a $10 million contract with Romanian energy and oil industry equipment producer Vulcan [BSE:VULC].
Under the contract, signed on March 12, Vulcan will provide 270 pumping units to KOC until December 31, 2017.
If Vulcan fulfils the contract in due time, KOC said will order other 700 pumping units, which will cover Vulcan’s production capacity for 2018-2018, Euro Insol said.
The Kuwait Oil Company was founded in 1934 and is a subsidiary of the Kuwait Petroleum Corporation, a government-owned holding company.
Last year, the subsidiary posted a $4 billion profit on a $20 billion turnover. It has a daily output of 1 million oil barrels and 1 billion cubic metres of gas.
The company is very much involved in the exploration, drilling and production of oil and gas within the State of Kuwait. Additionally, KOC is also involved in the storage of crude oil and delivery to tankers for export.
The company has a long and proud history, as explained on its official website:
“In 1934 the Kuwait Oil Company Ltd. was established by the Anglo-Persian Oil Company, now known as the British Petroleum Company, and Gulf Oil Corporation, now known as Chevron Corporation.
“The Company activities had extended to include exploration operations, on-shore and off-shore surveys, drilling of test wells, and developing of producing fields in addition to crude and natural gas exploration.
“The history of oil exploration in Kuwait dates back to the mid 30th where oil seepage has been discovered in North Bahra area.
“In 1938, Burgan well–1 was discovered based on surface geology mapping and gravity survey.
“During the following years, eight exploration and appraisal wells were drilled which established “Burgan” as one of the largest producing oil fields in the world marking a new era of Kuwait prosperity.”
By 1951, exploration operations had extended into Magwa and Ahmadi ridge area, oil was discovered and production began from the Magwa field in 1953. Exploration activities continued in the following years leading to the discovery of Raudhatain field in north Kuwait and Minagish field in west Kuwait in 1955.
“Following the liberation of Kuwait in 1991, KOC carried out what was at that time the largest single seismic exploration survey ever carried out globally. The entire country and its shallow waters offshore were covered by a grid of 2D seismic lines designed to image not only the shallow Cretaceous reservoirs but also to explore into the deep Jurassic and Permian levels. At the same time, KOC invested in the acquisition of the first 3D seismic data over the major known oil fields which provided much greater information about the extent and complexity of the known oil fields.
“During this period KOC took the opportunity to perform a number of 4D seismic pilot studies. These pioneering studies were some of the first ever carried out in carbonate reservoirs and the first in the Middle East.
“In 2002 a step change took place in the seismic industry with the introduction of single sensor technology. Since then, KOC has studied this technology in depth and gained experience through testing a selected pilot area in Minagish field with multiple geological objectives. The Single Sensor Technology proved to be capable of producing accurate images and detailed reservoir properties. More than 15 technical papers were published in most of the international conferences which comprised KOC successes with this technology.”
Subsequent years have seen KOC become involved in acquisitions of surveys and the company has very much embraced technology. In 2008 KOC Exploration established its first in-house data processing centre with the objective of processing and re-processing 2D/3D seismic data, develop targeted workflows to solve specific geophysical challenges and share it with other service providers as well as quality control of outsourced seismic data processing projects.
Today the company is involved in exploration, drilling, production, export and marine and gas operations.
KOC is an important part of Kuwait’s long-term future and the organisation has established a 2030 Strategy, as outlined on the corporate website:
The KPC Upstream Mission is: “To explore, develop and produce hydrocarbons within the State of Kuwait, the Divided Zone and internationally and so be a secure and reliable supplier to our customers, promote the care and development of our people and deliver on our commitments to our stakeholders in a compliant, profitable, safe and environmentally responsible manner.”
To achieve this, the KPC Upstream Vision aims: “To achieve a leading global position in Upstream Oil & Gas as an integrated, value-driven enterprise, by Maximizing the strategic value from oil, realizing the potential of gas, growing, reserves for a sustainable future, being an employer of choice, realizing value from technology, strengthening our commitment to HSSE, striving for excellence in performance, and contributing to the Enterprise and State.”
Among the key objectives is to maximise the strategic value from oil as a “secure and reliable supplier in response to customer needs”.
The company also aims to optimize the production and utilization of associated gas and maximize production of non-associated gas in support of the energy requirements for the State of Kuwait, its environmental objectives and the creation of value.
Another objective is to optimize and promote a portfolio of hydrocarbon resources that supports and sustains growth through aggressive onshore and offshore exploration and new acquisitions, and the application of appropriate reservoir management practices.
The company has also put a premium on the recruitment and retention of a talented workforce, whilst embracing the benefits of technology in areas such as research.
World class Health, Security, Safety and Environment initiatives, embracing best practices is another priority. To that end, in January 2017, the company’s HSE Team organized a Safe Driving & Traffic Awareness Campaign for KOC employees and contractors in cooperation with the Kuwait Motoring Company and General Department of Traffic.
KOC continues to set standards in the challenging oil and gas sector and is set to continue to play an important role in Kuwait’s future.