Interview with Sheikh Nawaf S. Al-Sabah Act. KUFPEC CEO
Can you describe KUFPEC’s Global Strategies which make KUFPEC today?
KUFPEC was established by Kuwait Petroleum Corporation (KPC) in 1981. It was projected to be an international oil and gas company focused on production, development and exploration activities.
KUFPEC aims at enabling KPC to diversify its income, position the State of Kuwait more firmly on the international stage and grow its core oil and gas business. It aspires to expose Kuwait’s upstream labor force to the industry’s international best practices and knowledge.
KUFPEC’s current portfolio consists of 45 projects, includes five operated exploration assets in Pakistan, Indonesia, Australia and other 13 countries with a total of 59 companies as partners in various Joint Ventures.
Our production has increased over the time and has stabilized above 100,000 boed, supported by a 2P reserves base of 430 mmboe.
KUFPEC implemented a new strategy to transform its portfolio to what makes KUFPEC today through primary goals and focus on:
Build a long-life asset base that can generate production and reserves growth and deliver consistent cash back to KPC; and
Build a diverse world class portfolio that will act as a bridge so that KPC can second staff to learn from leading operators and to transfer capabilities and new technology back to Kuwait.
What strategic steps that KUFPEC take in dealing with these formidable challenges?
First, we took immediate actions to protect and support our workers while ensuring that critical business operations continue and collaborate seamlessly.
Second, we reviewed current portfolio and restructured our business to mitigate our risks and plan our short and long terms goals to focus more on exploration activities and business value return.
Third, we put our business continuity plans and cash flow to a rigorous stress test under various scenarios focused on identifying key gaps and shortfalls, and we deployed and scale collaboration tools including virtual environments.
What is your plan on expanding KUFPEC’s exploration destination in South East Asia?
South East Asia is an area which has a particular interest for us. In that region alone we have two area offices: Jakarta and Kuala Lumpur.
In Indonesia, as recently as last year, we were awarded with the Anambas block in the West Natuna basin and this year we just completed our joint study in exploration area in Sumatra.
Also last year, we announced a major, multi-TCF gas discovery in Malaysia. This shows how active we are in exploring opportunities in South East Asia.
Our plan is to continue to monitor the available opportunities, focusing on proven basins and to consider the best offered fiscal terms. Our team has proven experience and capabilities to evaluate and execute on our exploration and production goals. We also ensure to bring value to the host countries where we operate.
How do you see KUFPEC’s participation in oil and gas exploration for decades in Indonesia?
KUFPEC has been actively investing in Indonesia since early 1980. KUFPEC was operator in the Seram non-Bula Block for more than 20 years from the exploration stage, field development drilling, facilities construction, and production stage.
The Seram facility included a mini refinery which processed the crude into High Sulphur Fuel Oil and Naphtha. KUFPEC, along with the operator, explore, develop and produce Natuna Sea Block A, which currently contributes an average of ~10,000 boed net to KUFPEC.
Natuna Sea Block A is a sophisticated operation and one of the highest-producing blocks in Indonesia with multiple fields, platforms, subsea satellite wells and gas export pipeline to Singapore.
KUFPEC regained its status as an operator in Indonesia in June 2019 when the government of the Republic of Indonesia awarded the Anambas Block Production Sharing Contract to KUFPEC Indonesia (Anambas) B.V., a subsidiary of KUFPEC.
The Anambas Block is located in the Natuna Sea covering an area of 3450 km2. The block neighbors Natuna Sea Block A. The Anambas Block provides intriguing upside potential due to its strategic geographical location and neighboring fields.
The first three years of exploration commitment includes 3D license purchase, reprocessing of 3D data, conducting G&G studies and drilling one exploration well.
How do you view Indonesia’s potential and prospect for investment in oil and gas sectors? And where do you see KUFPEC’s participation in this regard?
Indonesia still has potential to attract investors. The country provides a mix of mature basins on the western side and a more frontier type of exploration on the eastern side from the total of about 60 sedimentary basins.
We applaud the Government’s efforts to encourage new investment, however in view of a prolong low oil price environment it will require more attractive terms and conditions to boost Indonesia’s upstream competitiveness. This is especially necessary given the fundamental changes to the international energy market due to both COVID-19 and the worldwide energy transition.
We recognize that the greatest value to KUFPEC comes from a balanced portfolio with strong producing assets such as Natuna Sea Block A and a stable pipeline of new exploration blocks such as Anambas in Indonesia, along with similar assets worldwide energy transition.
We recognize that the greatest value to KUFPEC comes from a balanced portfolio with strong producing assets such as Natuna Sea Block A and a stable pipeline of new exploration blocks such as Anambas in Indonesia, along with similar assets worldwide. We intend to keep growing our business in Indonesia by looking for more business opportunities that fit with our corporate strategy.
Courtesy: Embassy of Indonesia, Kuwait
Indonesia In Kuwait Magazine
