Kuwait pushes for oil production boom: 3.2 million barrels per day by 2027, $10 billion annual investment
Kuwait’s oil sector is set for a significant expansion, with the Kuwait Petroleum Corporation (KPC) outlining a strategic plan to increase crude oil production capacity to 3.2 million barrels per day by 2026/2027. This ambitious target represents a 32% growth compared to the 2.422 million barrels per day produced during the fiscal year 2020/2021.
Gradual increase and market focus
The plan outlines a phased approach, with production steadily rising over the next few years. The current fiscal year (2023/2024) is expected to see production reach 2.9 million barrels per day, followed by a further increase to 3 million barrels per day in 2024/2025.
KPC is strategically targeting Asian markets for a significant portion of its crude oil exports, with domestic refining and international refineries also playing a crucial role. The data suggests a breakdown of the targeted 3 million barrels per day in 2024/2025:
- 1.326 million barrels for export to Asian countries
- 1.333 million barrels for domestic refining
- 319 thousand barrels for the World Petroleum Company (WPC) refineries
Domestic and international refining
Kuwait’s domestic refining capacity is expected to handle 1.33 million barrels per day, utilizing the capabilities of the Kuwait National Petroleum Company (KNPC) refineries at Abdullah Port, Mina Al-Ahmadi, and the Al-Zour refinery operated by the Kuwait Integrated Petroleum Industries Company (CABEC).
The data also highlights the growing role of international refineries owned by the International Petroleum Company (IPC). These refineries, specifically in Duqm (Oman) and Vietnam, are projected to significantly increase Kuwait’s external refining capacity. By 2026/2027, this capacity is expected to reach 331 thousand barrels per day, up from 167,000 barrels per day in 2020.
Shifting goals and production shortfalls
An initial plan had come into focus, for a more aggressive production increase, aiming for 3.5 million barrels per day by 2025. However, this target was not achieved due to production shortfalls at the Kuwait Oil Company (KOC) and the Gulf Oil Company. Delays in implementing oil projects are identified as a key reason for these shortfalls.
Long-term vision and OPEC+ commitments
Despite the initial setbacks, Kuwait remains committed to long-term growth. The country aims to reach 4 million barrels per day of oil production by 2035. KPC plans to invest a substantial $10 billion annually over the next five years and a total of $410 billion over the long term to achieve this goal.
It also highlights Kuwait’s adherence to OPEC+ production quotas and voluntary reductions. The current voluntary reduction of 135,000 barrels per day will remain in effect until the end of June 2024, resulting in a total production of 2.413 million barrels per day. This reduction follows a previous voluntary cut of 128,000 barrels per day announced in April 2023 and extended until December 2024.
Free gas production on the rise
The data also provides insights into Kuwait’s plans for natural gas production. Free gas production is expected to witness a significant jump, reaching 913 million cubic feet per day by 2026/2027, compared to 541 million cubic feet per day in 2020/2021.
Promising future for Kuwait’s hydrocarbon sector
Kuwait’s strategic plan outlines a clear path for growth in the oil and gas sector. With a focus on market diversification, increased refining capacity, and long-term investments, the country is poised to solidify its position as a major energy producer. The development of the Al-Durra gas field with Saudi Arabia is another promising prospect, with Kuwait’s share projected to reach half a billion cubic feet after production commences. This comprehensive plan positions Kuwait to navigate the evolving energy landscape and secure its economic future.
