Kuwait’s mega project to develop the northern oilfields is considered one of the most important and vital projects to Kuwait and the international oil companies, which are interested and eager to implement the project as soon as possible.

All concerned parties are awaiting the approval of the Kuwaiti National Assembly on this project, which practically means that the entire oil producing countries are now ready to conduct business with oil exploration and drilling companies under various companies’ names.

As for Kuwait’s mega project, the situation is different due to the fact that dealing with oil exploration and drilling companies would be through direct operational contrasts wherein companies will not be granted the right to own Kuwait’s crude oil.   Those companies will only be paid for their services and operations without interfering with the oil revenues, which belongs to the State.

Kuwait oil sector is dealing with this issue in a very transparent manner by answering clearly all inquires concerning the project.   Prominent members in the oil sector have held number of meetings with the Kuwait Economic Society, Kuwait Journalist Association, Kuwait Chamber of Commerce and Industry and other syndicates to point out the operational, legislative, legal and technical aspects of the project and opened their doors to answer any ambiguous question.

We highly evaluate the step adopted by the experts in the oil industry because oil is the sole source of our national income and therefore, we should be extremely cautious about our natural resource.   Concerned parties are hoping that the National Assembly would endorse the draft law concerning this project before the end of this Parliamentary term in June 2005.

The proposed project will include the development of northern oilfields Al-Riqqa, Al-Abdali, Al-Rawdattain and Al-Sabiriyah to increase its oil output from 400,000 to 900,000 barrels/day in thirty years through what is known as Operating Service Agreement.   The goal of developing these oilfields is to reach a steady and stable oil production to 3 million barrels/day by 2010 and 4 million barrels/day by 2020 to comply with the international increasing demand for oil.  The government is also eager to launch the project in order to ease the pressure of Burgan oilfield and to fully utilize oil wells in the northern part of the country where most of the reserve is available. 

   Kuwait has also confessed that it lacks the local expertise in this field to deal with these hard reservoirs and wells since Kuwait is no longer capable of increasing its production from Burgan oilfield.  Kuwaiti officials and experts in the oil field sector began considering this mega project almost 10 years ago. By 2002, 13 international companies specialized in the field of oil wells from all continents were considered qualified in this field.  They formed what is known as consortium under the management of ‘Exxon- Mobil Company”, ‘BP’ and ‘Chevron-Texas’. The estimated amount to implement the project is between 8-10 billion dollars in 20 years.  Oil companies are expected to make between 13-20% net profit, but that of course is subject to their speed, qualifications and the use of the latest technology available to finish the project.

In conclusion, the project to develop the northern oilfields will undoubtedly ease the pressure of OPEC and will also contribute in the reduction of oil prices in the middle and long terms.