CAPITAL: Kuwait City

MONETARY UNIT: Kuwaiti Dinar

REFINING CAPACITY: 886,000 b/d

OIL PRODUCTION: 1.836 million b/d

OIL RESERVES: 94 billion bbl

GAS RESERVES: 52.2 tcf

Kuwait Oil Co. (KOC) in January 1998 extended its technical services agreement with Chevron Corp. for a further 3_ years.

The contract called for Chevron to provide technical back-up for the development and transportation of oil from the supergiant Burgan field and in particular to apply leading-edge technology.

In July it was reported that Kuwait was expected to begin negotiations with foreign firms by year-end regarding development of five oil fields in the north of the country.

The Kuwaiti government was said to have been considering international oil company participation for 2 years and had appointed Sheik Saud Nasir Al-Sabah as minister of oil because of his personal commitment to the idea.

A host of officials from international majors had reportedly visited Kuwait to present ideas on economic models to enable development work in the country.

"Various concepts have been mooted," said Middle East Economic Survey, "most of them designed to assist KOC in shifting its historic emphasis from primary production to the use of the latest technology in secondary recovery and reservoir management.

"A model is being discussed whereby KOC would calculate its own costs for adding reserves and/or increasing field production levels through the application of enhanced oil recovery (EOR) techniques. The participating company or consortium would then get a fee for carrying out the required EOR work plus an additional bonus should the foreign party beat KOC`s cost targets for the project in question."

The development projects likely to be offered were believed to be Ratga field`s lower Cretaceous Zubair reservoir, Abdali field`s lower Cretaceous Zubair and Ratawi reservoirs, Sabriya field`s middle Cretaceous Mauddud and Upper Burgan reservoirs, Bahra field`s Mauddud and Burgan reservoirs, and Raudhaitan field`s Mauddud and Burgan reservoirs. KOC was said to have begun developing Ratga and Abdali fields, with output in 1998 at 25,000 b/d and 17,000 b/d of oil, respectively.

Downstream activity

In September refining unit Kuwait National Petroleum Co. (KNPC) said the total crude distillation capacity of Kuwait`s three refineries had been increased by 19.7% to 872,200 b/d in 1997. More than 84% of the country`s refinery products were exported in 1997.

KNPC disclosed that it intended to raise domestic refining capacity to 1 million b/d by 2000 and was also looking to build new refineries in Asia with a combined throughput capacity of 400,000 b/d.

The state-owned Kuwait Petroleum Corp. was reported in September to be lined up for major restructuring, to be overseen by the oil minister.

The Kuwait government`s Supreme Petroleum Council had given Al-Sabah a green light to transform KOC and KNPC-at the time separate companies-into business units of KPC.

The oil minister also received approval by the council for a plan to study privatization of state-owned Petrochemical Industries Co. and Kuwait Oil Tankers Co.

In November Kuwaiti officials began to explain their contract intentions to western majors that already had services contracts with KPC, notably British Petroleum Co. plc, Chevron Corp., Exxon Corp., Royal Dutch/Shell, and Total SA.