GJIA: How does the development of the northern oilfields through Project Kuwait fit into Kuwait Petroleum Company's (KPC) overall global strategy?

Al-Sabah: KPC's overall global strategy is to diversify its sources of income beyond simply selling crude oil. To that end, we have, over the past couple of decades, increased our refining capacities and, more recently, ventured into petrochemicals. As we look into the future, we recognize that the global oil demand will be increasing and that much of this demand will be on Gulf crude from Kuwait, Saudi Arabia, and the United Arab Emirates. We are aiming to fulfill our responsibility of being a stable and reliable provider of energy to the world by increasing our own production capacity from our current rate of about 2.4 million barrels a day to 3 million in the next few years and then 4 million a decade thereafter.

The key to this production boost will be Project Kuwait. When the project was conceived, we were producing 450,000 barrels of oil per day from those fields in the northern half of Kuwait; we want to double it to 900,000 barrels per day. We realize that in order to increase the capacity of those fields we need additional technology: a water flood and gas-lift system to increase the recovery rates from the wells. Also, as these fields mature, the water cut will be increasing in such a way that, while we currently produce less than a barrel of water for every barrel of oil, in the future we may have up to five barrels of water for every one of oil. What do we do with that water? How do we treat it? What corrosive effect does that water have on the equipment? All of these issues present technical challenges that KPC has not yet overcome. To try a water-flood or a gas lift system on our large reservoirs is relatively dangerous, so we are looking for help from our partners in international oil companies that have experience with this kind of project.