Market Trends of Kuwait Oil and Gas Industry
This section covers the major market trends shaping the Kuwait Oil & Gas Market according to our research experts:
Downstream Sector to be the Fastest Growing Segment
- A major overhaul of Kuwait's downstream sector is underway, following the award of long-delayed contracts for the al-Zour refinery and upgrades at al-Ahmadi and Mina Abdullah, which are expected to drive the downstream sector during the forecast period.
- Moreover, Kuwait's USD 12 billion Clean Fuels Project (CFP) is expected to be completed in mid-2020, and the USD 16 billion worth Al-Zour refinery is set to become partially operational in June, increasing the refining capacity of the country. Kuwait's downstream capacity is expected to reach 1.4 million barrels per day (mbpd) by 2020.
- The CFP will integrate the 270,000 barrel-a-day (b/d) Mina al-Ahmadi and 466,000 b/d Mina Abdullah refineries into a single complex, with new units added to increase total capacity to 800,000 b/d and improve the quality of output. A total of 16 new units are being built at the Mina Al-Ahmadi refinery as part of the CFP, and 14 new units are being built at the Mina Abdullah refinery.
- Therefore, with increased investments of over USD 10 billion in the petrochemical and refinery projects, Kuwait's downstream segment is expected to the fastest growing during the forecast period.
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Ambitious Oil and Gas Production Targets to Drive the Market
- Kuwait planned to invest over USD 100 billion between 2018 and 2023 in the oil and gas industry to boost production. These investments are majorly done, in order to increase the crude production capacity from the current levels of crude oil and natural gas production.
- Moreover, for natural gas, Kuwait may increase the production from 200 million billion cubic feet (bcf) per day to several folds by 2025 and beyond.
- As of 2019, nearly all of Kuwait's crude oil production came from onshore fields, but there are now active attempts to expand offshore production capacity. New investments are expected to be done in offshore oil and gas exploration and production in the coming years.
- Moreover, Kuwait has begun chemical injection into a heavy oil field in the north of the country. The enhanced oil recovery (EOR) technique, which improves the mobility of residual oil through the reservoir, is the first of its kind to be applied in the Middle East, and this may attract investments from many oil and gas companies.
- Therefore, the above-mentioned factors are expected to increase the production and drive the market during the forecast period.
