KPC puts in place strategies to address challenges of the five-year-plan

The Kuwait Petroleum Corporation (KPC) is formulating a comprehensive plan encompassing 30 strategic solutions to address approximately 14 challenges hindering the realization of the five-year plan, the strategic goals of the oil sector for 2040, and the envisioned energy transition by 2050.

These solutions encompass forging strategic partnerships with global oil and gas field services companies, specifically in the exploration and production domains, aiming to exploit the country’s most intricate resources and achieve the strategic target of producing 4 million barrels of crude oil daily, reports Al-Anba newspaper.

Among the proposed solutions is Kuwait’s proactive approach to global market needs, involving a study on the specifications of future products anticipated in international markets. This initiative aims to recommend essential modifications to projects such as the Al-Zour Refinery and Environmental Fuels to align with these market requirements. This aligns with the national strategy to augment refining capacity to 1.6 million barrels per day.

Additionally, the plan emphasizes the necessity for collaboration with the government to review and revise current regulations, facilitating partnerships with international operators and the private sector. This collaborative effort, particularly in local refining operations, is geared towards enhancing operational efficiency, optimizing capital spending, and mitigating risks.

The outlined solutions are part of KPC’s commitment to overcoming challenges and ensuring the successful implementation of the following strategic objectives:

1 – Carefully monitoring the trends and conditions of the oil market and the global economy and the variables they contain, with the aim of mitigating or reducing expected losses, as well as seizing the opportunities that arise in light of those variables.

2 – Developing trading tools as one of the options that provide the Kuwait Petroleum Corporation and decision makers with flexible mechanisms in the face of global oil price fluctuations.

3 – Working on mechanisms to reduce costs, provided that this process is continuous so that the oil sector achieves high levels of competitiveness based on low cost rates.

4 – Maximizing integration across value chains in order to reduce price exposure to volatility.

5 – Coordination with the Kuwait Municipality regarding the allocated lands.

6 – Preparing the Petroleum Corporation for the development plan for the Al-Zour region, taking into account the current and future capital programs and projects for the oil sector.

7 – Improving operational expenditures and capital allocation by adopting ECAP standards and setting priorities without affecting the implementation of strategic objectives, taking into account safety and risk management.

8 – Managing capital requirements, in light of the institution’s expected billion-dollar deficit, by choosing the optimal mix of proposed financing sources according to innovative mechanisms that reduce financing costs, and employing it in the optimal way to achieve optimal benefit from it.

9 – Improving cost effectiveness and efficiency through the use of the latest technological means and digitization in a way that suits the needs of the sector and achieves its goals.

10 – Implementing specific options to meet cash requirements, including retained stock dividends, external financing, liquidation of current assets, and partnership in future projects, in order to implement strategic projects.

11 – Continuously searching for available options to confront any short or medium-term cash deficit, which increases the institution’s hedging mechanisms for any changes and increases its ability to deal with them in a timely manner.

12 – Reviewing and enhancing contracting and implementation procedures for projects, including improving the approval cycle for government projects at the Central Agency for Public Tenders, to ensure that the time required for completion is reduced so that contracts are completed with the appropriate speed, ensuring that costs do not increase.

13 – Closely monitoring the performance of contractors with the aim of effectively overcoming the problems of delay in delivering the project in a timely manner, which ensures that there are no lost revenues for the sector as a result of delays in operations.

14- Expediting obtaining special approvals regarding the transformation study that aims to transform the Kuwait Oil Company and Kuwait Gulf Oil Company into integrated profit centers.

15 – Close coordination between the local fuel marketing sector and the Ministry of Electricity, Water and Renewable Energy with the aim of achieving the maximum benefit from liquefied gas shipments.

16 – Work on preparing a complete business model to achieve maximum benefit from the liquefied gas facilities in Al-Zour.

17 – Conduct a study on the specifications of future products that are expected to be required in international markets and propose the necessary changes in the Al-Zour Refinery and Environmental Fuels projects to meet these specifications.

18 – Deliver all manpower requirements on time, while ensuring that the appropriate skills and abilities are included in the manpower plan.

19 – Employing the required skills and enhancing current capabilities to ensure the ability to achieve strategic goals, including non-traditional production challenges in specialized operations of local petrochemicals, and the field of research, development and trade.

20 – Paying attention to additional marketing skills and capabilities to support the sector’s operations.

21 – Ensuring the existence of an optimal business and operating model to allow strategic partnerships with international oil companies and oil field service companies to exploit Kuwait’s most challenging resources in the field of local exploration and production.

22 – Joint coordination between the Ministry of Electricity and Water and the Petroleum Corporation to obtain the fuel mixture to meet the “electricity” demand, as well as establishing projects to achieve the same goal.

23 – Involving the Supreme Council for the Environment and the ministries in the proposed mandate to move forward with the energy transition strategy and secure the capital and lands required to implement energy.

24 – Selecting and registering the most suitable KPC partners and new energy companies to achieve emissions reduction goals.

25 – Ensuring the presence of appropriate governance to monitor the implementation of strategic objectives.

26 – Implementing the digital transformation strategy, which includes strategic initiatives such as culture, digital capabilities, and smart process automation.

27- Developing the Innovation Center of Excellence to implement innovation initiatives faster.

28 – Kuwait Oil Company implements initiatives to improve operational expenditures and capital expenditures related to the “Performance and Efficiency Improvement” program.

29 – Improving the performance of refineries through 4 main metrics: energy density, operational availability, processing unit utilization and net cash margin metrics.

30 – Coordinating with the government to review and amend current regulations to allow the pursuit of partnerships with international operators and the private sector to participate in the local business of the Petroleum Corporation, especially in the field of local refining, to improve operational efficiency and capital spending and reduce risks.

The data stated that the plan to address the challenges of the oil sector is based on distributing responsibilities among the parties required to implement the proposed plans to address the challenges, as they can be limited to sectors to include the Petroleum Corporation, its affiliated companies, the planning sector, and the human resources sector and coordination with the government and ministries.