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Kuwait to Miss Its 4M B/D Crude Oil-Production Target

Kuwait to Miss Its 4M B/D Crude Oil-Production Target
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Τρι, 8 Οκτωβρίου 2013 - 17:32
Kuwait won't be able to meet its crude oil production target of 4 million barrels a day by 2020 because of political deadlock between parliament and government that has often hampered energy projects, people familiar with the matter have said.
Kuwait won't be able to meet its crude oil production target of 4 million barrels a day by 2020 because of political deadlock between parliament and government that has often hampered energy projects, people familiar with the matter have said.

"Despite what the country is trying to portray about its energy industry, the truth is the political system is lacking and it is impacting the energy projects, which are now facing delays," said a person familiar with the matter, who asked not be identified.

Kuwait , a member of the Organization of the Petroleum Exporting Countries, has a capacity of around 3.2 million barrels a day and has recently said it is producing at similar levels, which are higher than the 2.9 million-barrels estimated by Gulf-based analysts.

In the past several years, however, disputes between the Gulf state's cabinet, which is led by a prime minister appointed by the ruling emir, and the parliament, which has greater say than in other neighboring Arab monarchies, have crimped development.

Kuwait recently shuffled the ministers in its cabinet, the 12th such move since 2006, following parliamentary elections in July that were boycotted by the Islamist, nationalist and liberal opposition.

"If we are lucky we will see another 500,000 or 600,000 barrels a day of additional oil by 2020, but I cannot see how they will achieve their target on time," the person said.

Last month, Hashem Hashem, the head of the state-owned Kuwait Oil Co., said he expects the company to produce far less heavy crude from the Ratqa field and less light oil from the Jurassic field by 2020 than originally planned. He didn't elaborate.

Other energy projects are also facing delays. Kuwait Petroleum Corp.'s project to produce 270,000 barrels a day of heavy oil will not reach full capacity by 2020, said the people familiar with the issue. Attempts to reach KPC for comment weren't successful.

And the planned 500,000 barrel-a-day Wafra crude project in the Saudi-Kuwait Neutral Zone is unlikely to start production before 2020 and will reach full capacity at least five years later, the people said.

Robin Mills, head of consulting at Manaar Energy in Dubai, said: "If the country really decided they are going to do it (reach the target) and they really invested and got these projects moving then maybe they could, or maybe it would be a year or two later, but there is no sign in Kuwaiti politics that this is going to happen.

"But it is almost impossible...and it is getting harder and harder for them to reach their target," Mr. Mills said.

Mustafa al-Shamali, who was named oil minister in August, has shrugged off concerns that the country could miss its 2020 oil production target.

"We are producing 3.2 million barrels per day... and yes, we are going to increase our capacity to 4 million barrels per day by 2020," he told The Wall Street Journal in Riyadh last month, when asked about its future production targets.

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