The Oil & Gas Year Kuwait 2011
2011 saw Kuwait mark 50 years of independence, 20 years since the Iraq invasion and five years of Emir Sheikh Sabah Al Ahmad Al Sabah’s reign. A year that saw political instability grip the region has, by contrast, seen Kuwait enjoy a period of relative stability. Kuwait’s democracy, unique in the Arab world, continues to mature and encourage optimism.
The state’s decision in 2010 to enlist the services of Shell to explore deep gas in the Jurassic fields demonstrates an institutional reticence to working with international oil companies is now a cautious openness to collaboration. In February 2011, the national oil company KPC signed a memorandum of understanding with BP committing to a deeper co-operation in exploration and refining activities.
Upstream, 2011 also saw Kuwait’s domestic demand for gas grow, leaving the country with a production deficit of 28 mcm of gas per day. A target put forward by the Kuwait Oil Company would see the nation reach 113 mcm per day by 2030, of which non-associated gas would comprise 68 percent. Downstream, Kuwait’s energy industry is anticipating the long-awaited fourth refinery Al Zour with capacity to process 800,000 barrels of oil per day.
Finally, much of the optimism in Kuwait is generated by public investment, which is driving economic growth. With more than $100 billion of government infrastructure spending planned, the forecasts for Kuwait growth are healthy. The markets are calling for more privatisation to allow capital to be active and there are signs that the government is moving in this direction.