عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Kuwait’s KUFPEC Borrows $1.1 Bn to Expand Shale Gas Business

Kuwait’s KUFPEC Borrows $1.1 Bn to Expand Shale Gas Business
TT
20
TT

Kuwait’s KUFPEC Borrows $1.1 Bn to Expand Shale Gas Business

Kuwait’s KUFPEC Borrows $1.1 Bn to Expand Shale Gas Business

The Kuwait Foreign Petroleum Exploration Company (KUFPEC) has signed a $1.1 billion finance deal with a number of banks to expand its oil and gas operations, the company’s chief executive said on Tuesday.

Japan’s Sumitomo Mitsui Banking Corporation (SMBC), First Abu Dhabi Bank, Societe Generale, Japan’s Mizuho and Scotiabank are the banks involved in the transaction, according to a company statement.

The new financing includes a two-year grace period and is in addition to $3.5bn that KUFPEC has borrowed from banks since 2013.

The company will finish repaying the $3.5 billion next year, Sheikh Nawaf Al Sabah told a news conference in Kuwait.

It is currently producing 8,000 barrels of oil equivalent a day in Canada and plans to gradually increase output there by drilling a total of 2,000 wells, Al Sabah said.

KUFPEC, a subsidiary of state-owned Kuwait Petroleum Corporation (KPC), aims to boost its output to 150,000 barrels of oil equivalent per day (boed) by 2020 from 119,000 boed now, a level it will maintain until 2040, KUFPEC’s CEO noted.

He also said the company was currently studying new future oil and gas acquisitions abroad, without providing more details.

Al Sabah further noted that the company’s total assets are currently about $ 7 billion.

Regarding the company’s total reserves, he said they currently comprise 494 million barrels of oil equivalent, and the Canadian project will add 28 million to that.

Achieving KUFPEC’s foreign production target has been a multinational effort. The company is producing 38,000 barrels of oil equivalent a day in Australia, and it has drilled 120 wells to produce gas and condensates at shale fields in Canada’s Alberta province.

The project’s development plan aims to provide the Australian market with gas while also having the right to transfer part of the production to Kuwait should the need arise, Al Sabah stressed.

Most Viewed

 
Business

Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
TT
20
TT

Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.