How is Kuwait pursuing its energy security goals, and will expansion of gas production play a role?
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EMAD SULTAN: The expansion of non-associated gas production, development of heavy oil production and commissioning of the new Al Zour refinery are key to fulfilling increasing energy needs in Kuwait.
Regarding non-associated gas production, KOC recently increased its total production capacity from 200m to 500m standard cu feet per day (scfd), with the commissioning of three new Jurassic production facilities in FY 2018/19. Plans are in the pipeline to upgrade the new facilities, which will provide an additional 150m scfd by March 2020. Furthermore, the construction of two more Jurassic production facilities will bring total non-associated gas production capacity to 980m scfd by the beginning of FY 2022/23. Additional upgrades of Jurassic gas facilities are on the way and are anticipated to provide a production capacity of over 1bn scfd by FY 2023/24. Heavy oil will also contribute to fulfilling Kuwait’s energy needs. By the close of FY 2019/20 KOC will commission a new central production facility that is expected to increase heavy oil production by 60,000 barrels per day. Once the Al Zour refinery is commissioned, this heavy oil production will be converted into low sulphur fuel oil for power generation.
In what ways has cost optimisation been integrated as part of KOC’s operational strategy?
SULTAN: A top priority for KOC is the optimised use of resources across all levels of the organisation. Optimisation will keep operational and capital expenditures as efficient as possible, with an increased emphasis on delivering projects in a timely manner and with strict cost controls. We have several processes in place to ensure that cost optimisation is integrated into our activities. These include integrated asset plans to help ensure the efficient use of rigs – a major cost component for any oil and gas company – and a stage gate process, which ensures proper identification, selection, definition and execution of our production development projects. We are using the latest technology to ensure the efficiency of our operations, such as a realtime drilling decision centre for optimal implementation of our drilling activities, and our integrated digital fields system, which provides information for better control of water produced from reservoirs. Furthermore, we are evaluating the execution of concentrated solar power technologies to produce steam for our heavy oil operations. All of these activities provide substantial cost savings and help to optimise operations.
What are some of the challenges that must be overcome in order to best pursue heavy oil projects?
SULTAN: We can group the challenges heavy oil projects into two main categories: technical and economic. There is a certain amount of uncertainty about the performance of the oil recovery technologies that are needed to produce heavy oil. To overcome this challenge we have established several initiatives at pilot and laboratory levels, in order to evaluate and optimise both well and reservoir performance.
There are a number of other challenges that are related to costs associated with this type of project. We are currently considering actions such as implementing concentrated solar power in order to reduce steam generation costs, which contribute greatly to the total development cost of heavy oil projects.
Which initiatives are used to minimise environmental impact of existing assets and future projects?
SULTAN: The biggest environmental impact of any oil and gas company operation comes from gas flaring, gas emissions and liquid spills. We have strict controls in place to minimise all of these issues. Moreover, we are expecting to reach maximum flaring of 1.2% by the end of 2019, and a new gas-sweetening facility is planned for commission in the West Kuwait area to further reduce flaring – to below 1% – after 2020.
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