Will you be impacted by Kuwait’s 2040 Oil Strategy?
The Middle Eastern region has long been the world’s biggest player for oil and gas. Reported by BP, a global energy business, the region remains as the largest oil producer and the second largest gas producer, representing 36% of global liquids production and 20% of global gas production.
Comprising of energy-rich nations – Saudi Arabia, Iran, Iraq, and Kuwait – the Middle East can continue to expect massive growth, particularly for Kuwait.
What makes Kuwait a major player in Oil?
The land itself is oil-resource rich, producing and supplying oil to various developed countries across the world. It accounts for nearly half of Kuwait’s GDP, around 95% of exports, and approximately 90% of government revenue. Reported by Export.Gov, Kuwait is a major oil supplier in the world and a member of the OPEC consortium. The nation also holds approximately seven percent of global oil reserves and has a current production capacity of three million barrels per day (bpd).
Although Kuwait is ranked sixth for its crude oil reserves, coming after its regional competitors – Saudi Arabia, Iran and Iraq – its potential as a country still brings positivity. Along with it, a strategy for 2040.
What is Kuwait’s 2040 Oil Strategy?
Driven by global trends, there has always been a long-term global demand for crude oil and there has been a shift of demand from Europe to Asia. To add on, there is also a rising global demand for refined products – namely petrochemicals and natural gas – and an inevitable move towards renewable energy resources.
To meet this burgeoning demand, Kuwait is expecting an investment of AED500 billion by 2040 in the following areas:
- Upstream infrastructure to boost oil extraction
- Downstream projects for a larger share of global petrochemical products
What is in the pipeline?
There is going to be a change of plans for the State-owned Kuwait Oil Company (KOC) to start producing heavy oil in February 2020 amidst plans to boost total oil production capacity to three million bpd within five years. The first contract, worth AED53.8 million, was reportedly awarded to Al-Ghanim International Company. The second contract, worth AED42 million, was awarded to Heavy Engineering Industries Company.
KPC is the umbrella organisation which brings all Kuwait Oil and Gas owned companies together.
The corporation has announced its intention to increase oil production capacity to four million bpd by 2020. In addition, KPC has announced intentions to increase natural gas production to four billion cubic feet per day by 2030. Future production increases will depend on actual implementation of several upstream projects including the development of heavy oil capacity of 60 thousand bpd. KPC has announced an approximately AED115 billion investment plan to be executed between 2015 to 2020. This investment will also be equally divided between the upstream and downstream sectors.
The KGOC 2040 Strategic Plan is underpinned by 2040 KPC’s Strategic Directions. For the domestic upstream business, there are four stages planned, namely:
- Stage 1: Initiation and preparation
- Stage 2: Update Domestic and International Upstream Vision & Mission
- Stage 3: Conduct Upstream Sector Situation Analysis for KOC, KGOC and KUFPEC
- Stage 4: Develop Domestic & International Upstream Strategic Plan for KOC, KGOC and Kuwait Foreign Petroleum Exploration Company (KUFPEC)
How will these projects affect hiring within the sector?
With bigger investments and greater commitment to expand its oil and gas production, various key roles in the business such as drilling engineers and specialists will be in even greater demand.
For example, the development of new hydrocarbon resources such as heavy, offshore and unconventional fields will induce a demand for drilling engineers, directional drillers and drilling fluids engineers.
Similarly, sustaining crude oil production from existing reservoirs through the application of new technology will require talent that have experience in coil tubing and well testing. Slick-line and wireline logging professionals would thus be suitable in these areas as well.
With the rise of renewables within the oil sector to reduce energy consumption, there will also be a potential rise in demand for candidates specialising within renewable energy sector.
Is your organisation sourcing for these talent?
2020 will be a big year for the UAE, and the job market for oil and gas has only been facing an upward pressure with the constant influx of projects. Resonating with this trend, National Bank of Abu Dhabi also reported recently that it is unlikely for the region to experience any layoffs in the region’s oil and gas industry. According to the Economist, this is due to UAE’s oil production industry which is projected to increase as long as the region continues to upgrade its upstream facilities.
If your company is looking for niche talent to support your organisation’s upstream and downstream strategy, or if you are looking for opportunities within UAE’s upstream and downstream oil and gas market, do not hesitate to contact us via the form below: