Kuwait Oil Company, Leader in Kuwait Oil and Gas

Kuwait has the fourth largest oil reserves in the world behind only Saudi Arabia, Iran, and Iraq.  How do you foresee the role of oil in Kuwait’s economy and is the dependence on oil a concern to you, how do you assess the diversification efforts made by the government?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: In Kuwait we are definitely one of the major oil producers and we play a role in the energy sector.  We feel that we are part of the world and when there was a high demand for energy and oil in particular we responded positively by producing the maximum in 2008. In regard to diversification, the long term concerns are there and Kuwait should seriously think about diversifying sources of income for the country.

You had an important announcement this year that you had reached 3.15 million barrels a day which was the target for 2013-2014 but Kuwait would like to reach 4 million barrels per day.  What are the main challenges and is this goal achievable?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: The main goal is achievable by 2020.  The main challenge is that is may seem easy while there are many challenges.  In the oil industry we categorize these as three main challenges.  The subsurface- reservoirs and their capabilities to produce the amount we want carry challenges.  The surface facilities- gathering center, pipelines, and facilities above the ground- need to be built in a timely manner that is consistent with the development of the fields.  Third, export facilities like tankage and export terminals also pose a challenge.  All three of these elements make up our production challenge and each of them need to be able to deliver and sustain the four million barrels per day capacity.  The main challenge we are facing now is producing heavy oil and the gas reserves needed for the energy sector in Kuwait.  We are working on these challenges and seeking assistance from international and service companies to assists us in dealing with these challenges. 

How much space do you envision for international oil companies to take part in this project and your expansion plans?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: The form that we are advocating is for assistance.  Production sharing is not allowed according to the constitution of Kuwait so we only seek assistance from major oil companies.  Hopefully we will be able to find a suitable way to reach an agreement with them.  For example, recently we reached an agreement with Shell to help assist us in the major discovery of gas.  We are also seeking assistance in the areas where we currently do not have enough experience like heavy oil, and Enhanced Oil Recovery (EOR).

What is the effect of the global economic crisis on the depression of oil prices?  Are you going to reevaluate any of your current projects?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: The spike in oil prices wasn’t comfortable for us but we knew that it wouldn’t last.  Over a long period of time we aim and hope that there will be some sort of stability.  We had a clear strategy to reach four million barrels per day by 2020 and we went ahead with our plans.  When the prices fell we decided not to change our strategy because it was seen only as a short term issue and we believed soon a recovery would happen.  Luckily I think we are able to say the worst is over and now we are seeing some stability in oil prices that we are comfortable with (70 to 80 dollars a barrel) for our plans to fall into place.

What is your opinion regarding the future of oil?  Is there enough to cater to the world’s needs?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: In my personal opinion I think that the demand of energy is directly linked with economic development.  If we are talking about the economic development of the entire world then there is a definite need for energy from all sources in order to cope with the growth. I believe fuel, oil, gas, nuclear, renewables, coal will all be needed although oil will always be a major player in the energy scene.  We need to also be environmentally responsible and adhere to the environmental legislations whether its clean up or other environmental measures.

You have a research team dedicated to capturing carbon and you are working on initiatives to develop solar energy.  Can you elaborate and do you see yourselves in the  future becoming a renewable energy company?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: This is in our 2030 strategy as a part of being more environmentally conscious and addressing renewable energy in order to meet the increased demand for energy.  There has been a very rapid increase for power and the demand for energy will more than double in the next ten to fifteen years and this will be a challenge we need to meet in an environmentally friendly manner.  We are going to look at renewable sources of energy- solar energy in particular due to the abundance of sun in this part of the world.  The economic benefit from this is that every BTU of energy that we can use from renewable sources frees up oil for export.

Are you going to play a major role in the future as a major exporter of gas or will you only cater to your domestic needs and power generation?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: Realistically, I think it will only cater to our domestic needs although we have been making discoveries and have undertaken a major aggressive exploration program to go after deep gas reserves.  We are very optimistic we will be able to find additional reservoirs of gas, however.  Although I don’t think we will become major exporters, we are exporting LPG extracted from natural gas in small amounts and this will increase as we increase our production.

What is your long term vision for Kuwait Oil Company for 2030 and what is next?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: The 2030 strategy for Kuwait Oil Company calls for four million barrels a day capacity for production that is to be sustained between 2020-2030.  For non-associated gas we plan to produce one billion standard cubic feet per day by 2015.  The additional exploration activities will hopefully allow us to produce another 1.5 billion cubic feet per day to total 2.5 billion standard cubic feet per day by 2030.  This is our vision.

What are your worries for the future?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: The major challenge that we have is gas.  We see the energy demand in Kuwait rapidly increasing and the gas has great value for the country.  During peak demand time in the summer due to power consumption we are importing energy and this is a concern.  Additionally, it is cleaner for the environment than the fuel we are burning and also, in the non associated gas production we are not limited by OPEC and we can produce what we want to produce.  We can replace the oil that is burned and consumed by power plants to free it for export.  Another important challenge in Kuwait that is national workforce development from leadership, to experts and to operators ,as we  are dealing with the wealth of the country.

As an ambassador to your country and with Kuwait Oil Company being one of the most important companies in Kuwait and even globally, what is your final message to our audience about Kuwait?

Kuwait Oil and Gas, Kuwait Oil Company (KOC), Chairman and Managing Director, Sami Al Rushaid: We would certainly welcome anyone from anywhere in the world to come to Kuwait.  We are not biased towards the west or the east and we welcome all nationalities.  I think visitors will find that the people of Kuwait are friendly and Kuwait is easy to adjust to living in and can consider Kuwait their second home.