Due to the recent oil industry downturn, Kuwait’s state-held firm Kuwait Foreign Petroleum Exploration (KUFPEC) has cut its target for oil and gas production outside Kuwait to 150,000 barrels of oil equivalent per day (boepd) by 2020 from the previous 200,000 boepd target, the company’s chief executive told Bloomberg.
KUFPEC will be looking to buy oil and assets in the U.S. and other markets that meet the firm’s “strategically identified criteria,” CEO Shaikh Nawaf Saud Nasir Al-Sabah told Bloomberg in an emailed response to questions, without specifying the criteria or potential targets.
“During the downturn, we purposefully avoided making large acquisitions that were risky at the time,” Al-Sabah told Bloomberg. “We could not justify the high valuations others were paying,” the manager noted, adding that revising down the production targets was more realistic. The targets could be revised later, Al-Sabah said.
Last year KUFPEC—a unit of the Kuwait Petroleum Corporation—produced 84,000 boepd. Kuwait’s overseas oil and gas production arm has operations in 14 countries, including in Canada, the UK, Norway, Egypt, Malaysia, Indonesia, Australia, and China. One of KUFPEC’s notable assets is a 13.4-percent stake in the Wheatstone LNG Project in Australia, the second-largest partner in the project behind the operator Chevron Australia.
Kuwait is currently reducing its domestic production as part of the OPEC/non-OPEC production cut deal that has lately started to have a clear impact on the oil market as the global oversupply and floating storage decline. Related: Why Oil Prices Could Dive
Although Kuwait is restricting production with the OPEC and allies’ deal, it has ambitious targets to increase its production capacity in the long run.
Kuwait plans to increase its crude oil production capacity to 4.75 million bpd by 2040, compared to a current capacity of 3.15 million bpd, the CEO of Kuwait Petroleum International, the refining arm of Kuwait Petroleum Corp., said last year. Kuwait’s more immediate plans are to raise its capacity to 4 million bpd by 2020 and keep that capacity until 2030, when it would seek to start raising it to 4.75 million bpd by 2040, Kuwait Petroleum International’s CEO Bakheet al-Rashidi said.
By Tsvetana Paraskova for Oilprice.com
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