As member of OPEC, Kuwait owns about 10 per cent of the world's
proven oil reserves. Its reserves of 96.5 billion barrels are
expected to last more than 100 years.
A Central Bank of Kuwait report put the country's gas reserves
in 1997 at 52.4 trillion cubic feet, or 1.1 per cent of the world's
proven reserves. This figure, however, does not include Kuwait's
share from operations in the Neutral Zone border area which it
shares with Saudi Arabia.
Foreign concessionaires dominated Kuwait's oil industry until
1973 when production peaked at 3.3 million bpd at low prices.
By 1977 the industry was nationalised and a policy of conservation
and reduced output was implemented. In 1981, production touched
a low of 1.25 million bpd but rose to 2 million bpd in 1990.
During the 1970s and 1980s Kuwait moved heavily into downstream
activities including local refining, transport, overseas refining,
and distribution of products -- through the acquisition of foreign
assets. Refining and the overseas distribution of products, besides
generating higher profits, provided market protection during gluts
in crude oil. Kuwait also entered the field of overseas exploration
and production.
After a period of reorganisation in the late 1970s and the acquisition
of foreign corporations in the 1980s, Kuwait's oil industry, supervised
by the Ministry of Oil, is controlled today by the Kuwait
Petroleum Corporation (KPC) as the overall coordinating
body.
Kuwait Oil Company
(KOC) carries out exploration and crude production.
Kuwait National
Petroleum Company (KNPC) manages refineries and domestic
marketing.
Kuwait Oil Tanker
Company (KOTC) undertakes transportation.
Petrochemicals
Industries Company (PIC) produces petrochemicals.
Kuwait Foreign
Petroleum Exploration Company (Kufpec) handles exploration
of oil overseas.
Kuwait Petroleum
International (KPI) manages downstream operations in Europe.
Kuwait Aviation
Fuelling Company supplies fuel to aircraft that use Kuwait
International Airport.
Sante
Fe International Corporation provides expertise in exploration,
drilling, pipelines, etc. Sante Fe's wholly-owned subsidiary,
C.F. Braun & Company, provides refinery engineering services.
The destruction of Kuwait's oil industry during the Iraqi occupation
was extensive, but damage to exploitable reserves was estimated
at only about 2 per cent. Several hundred oil wells and gathering
stations (GSs) required replacement. All the three domestic refineries
were beyond operation. By mid-1994, however, nominal production
capacity of crude from Kuwait and its share of the Neutral Zone
was around 2.4 million bpd, and refinerys capacity was back
to pre-invasion levels.
Today, the industry has recovered fully from the onslaught of
the Iraqi invasion. The State-owned KPC is estimated to be the
seventh largest oil company in the world. It has extensive overseas
operations including refineries and large downstream distribution
networks in western Europe. Non-Arab states, however, are Kuwait's
main customers; the country exports some 78 per cent of its products
to them.
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