Jamal Jaafar, CEO of Kuwait Oil Company, speaks to Pipeline Magazine’s Nadia Saleem about how heavy oil is playing a greater role in the company’s production plans
What is your near-term business outlook?
We continue seeing a strong global oil demand growth, reaching this year an increase of 1.65 million barrels per day, similar to last year’s growth and signifi cantly greater than the last 10-year average of 1.1 million barrels per day. Forecasts for 2019 indicate that oil demand will continue increasing at an accelerated rate, mostly due to economic growth in China and India, but also Latin America and Middle East countries contributing to this increase in demand. Additionally, there is a continuous decrease in global oil inventories since January 2017. Total OECD commercial oil stocks are around eight per cent lower than the same time one year ago, and around 40 million barrels below the latest five-year average. These two structural factors, increasing oil demand and decreasing global inventories, together with the effectiveness of production cuts recently managed by OPEC and Russia, are providing a relatively solid ground for oil prices over US$70 per barrel in the near-term.
What production achievements are you looking forward to this year?
KOC is commissioning several important facilities during 2018/2019 amongst which is a central production facility for heavy oil and three additional facilities to handle non-associated gas and light oil production. KOC is increasing its non-associated gas and light oil production this year, and with the production facility for heavy oil, we will be adding 60,000 barrels per day of heavy oil to our production portfolio.
How far along is KOC on the journey towards cost and operational efficiency?
We have a close follow up on the performance of KOC operational costs, and we are undertaking several cost optimisation initiatives that include process optimisation, contracts negotiation and increased energy efficiency in our operations. As KOC moves towards the development of more difficult oil through the implementation of secondary and tertiary recovery projects that involve water, steam and potentially chemical injection, there is a more stringent need to emphasise cost control and operational efficiency and we are acting accordingly. It is also worth mentioning that we are receiving strong support on our operational efficiency initiatives through our engagement with the international oil companies through our enhanced technical service agreements.
What is your view on digitalisation within the oil and gas industry and what steps is KOC taking towards it?
We consider digitalisation a critical aspect to improve our operational efficiency and to support the optimisation of our oil and gas production. Back in 2011, KOC started the implementation of the Kuwait Integrated Digital Field project, with the objective to increase recovery and optimise production through collaborative decision environments with real time validated data, automation and right-time decision support systems.
Through these years, we have expanded our integrated digital fields with other initiatives, such as the Real Time Drilling Decision Center and the Well Inventory Data Entry, which provide significant savings in drilling time and rig efficiency; and the Well Surveillance Management System, a digitalised system that has enabled KOC to reduce over 15 per cent of the downtime of electrical submersible pumps. We continue looking for opportunities to implement state-of-the-art digital technologies that will continue helping KOC to achieve its strategic targets with overall increased efficiency.
What role has ADIPEC’s growth and evolution over the years played for KOC?
KOC has continuously and actively participated in ADIPEC through these years, not only with a presence of an important booth, which helps us to communicate our strategies and plans, but through the presence in several technical sessions where our staff have delivered a significant number of technical papers. We expect to keep a growing participation in this highly important conference.