The Kuwait National Petroleum Company (KNPC) announced recently it was launching tenders in the coming weeks for a new $14.5 billion refinery at Al Zour. The new plant, which will have a capacity of 615,000 barrels per day (bpd), is expected to be complete by 2017 and is part of plans to increase national production to 4m bpd by 2020. In the coming weeks the KNPC will also choose consultants for the Clean Fuel project, an $18bn upgrade of two existing refineries that will increase their capacity and enable them to produce lighter grade fuel. While discussing the tender plans, Hani Hussein, the minister of oil, told local media that Kuwait is currently producing around 3.1 million barrels of crude per day and that it believes a price of $100 per barrel is "fair", given the fundamentals of supply and demand. Noting that he expects between seven and nine companies to make tender offers for Kuwait's refinery projects by the end of May, Hussein also said it was important that the country should avoid becoming reliant on a high oil price. With prices hitting $126 per barrel in April, the country is estimated to have earned around KD2.5 billion ($8.97 billion) in monthly oil revenues. That figure, Al Shall Economic Consultants said, would see yearly profits hit KD30 billion ($107.66 billion), some KD17.2 billion ($61.72 billion) higher than originally estimated in the budget. Crude oil exports to China rose 79 percent year-on-year (y-o-y) to 1.3 tons in April, equivalent to 308,000 bpd, while in March, exports to Japan rose to their highest level in three years – 1.67m barrels – as the country bought more fossil fuels to meet electricity demand after the closure of its nuclear reactors following the Fukushima disaster in 2011. Exports to South Korea also increased by 41 percent in March. Underlining the potential in Southeast Asia due to increasing pressure on Tehran, Petronas, the Malaysian state-run oil firm, halted imports of Iranian crude in March, listing Kuwait as a potential alternative. While speaking with local media recently, Ahmad Al Arbeed, a former oil executive, said the surge in exports and high prices has boosted domestic confidence in the future of oil. Launching an initiative that aims to see Kuwait become the world's "capital of oil" by 2022, Al Arbeed said the country's private sector "needs a way to be paved [for it] by the oil sector, coupled with legislation that protects and helps local and foreign investors". – SG/Agencies While critics say progress in the oil industry had been hampered in recent years due to domestic political wrangling, progress is seen as accelerating in a number of important projects, including the Al Zour refinery and the Clean Fuel initiative, following Hussein's appointment as minister of oil. A key challenge for Hussein will be forwarding plans for "steam-flooding" huge reserves of heavy oil that exist in the Wafra oilfield between Kuwait and Saudi Arabia. The process involves steam being injected into reservoirs to heat the crude and make it less viscous, allowing it to flow into the well. A lack of progress at the field has been blamed on a paucity of water, which are needed to supply the necessary water for the project, with some officials stating that more help is needed from international oil firms to extract an estimated 25bn barrels at Wafra. KNPC's exploration and production arm is reportedly in talks with ExxonMobil and Total on a partnership to develop the fields, the Financial Times wrote in April. Hamid Majid, the special advisor to the president of Canada Natural Resources, said at the Gulf Petroleum Conference 2012 in March that if Kuwait could harness enhanced oil recovery methods and techniques, it will be able to extract an estimated 1trn barrels, equivalent to 30% of the world's reserves. __
