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Kuwait’s political crisis is undermining energy growth and options

Some major changes are needed if Kuwait hopes to reach its oil production goals anytime soon.

An employee of the Kuwait Oil Company (KOC) looks at 25 January 2005 the Gathering Center No.15 of al-Rawdatain field, 100 kms north of Kuwait City, following its inauguration just three years after coming under explosion. The KOC affiliated center came under fire by the eve of 2002 due to an oil leakage from the main pipe that protrudes from the Center. According to the emergency plan the center was immediately suspended from action. The oil leakage that reached the gas boosting station 130 and neighbourin
To:

Al-Monitor Pro Members

From:

Gerald Kepes

President, Competitive Energy Strategies, LLC

Date:

May 17, 2023

Bottom Line:

Kuwait’s oil sector has had a 4 million barrel per day (mmb/d) crude production capacity target since 2010, if not before. In 2021, the date for achieving the goal was moved from 2020 to 2035. Meanwhile, capacity had declined to 2.8 mmb/d from 3.35 mmb/d. Kuwait Petroleum Corporation’s (KPC) upstream arm, Kuwait Oil Company (KOC), is clearly struggling to execute on this and other strategic objectives.      

An increasingly mature, technically complex upstream sector requires risk taking, higher spending and expanded capabilities. Increased investment in downstream/petrochemicals in an integrated energy sector requires timely execution. Yet KPC has experienced minimal growth in institutional capacity over the past three decades due to having zero strategic autonomy and limited operational autonomy. In order for results to change, either the political management of the energy sector or the design of the sector must change.