20th World Petroleum Congress
Kuwait Ministerial Sessions
KUFPEC Long-Term Strategy and Projects
6th December 2011
KUFPEC Deputy Chairman and Deputy Managing Director
(Operations East)
Mr. Ali D. Al-Shammari
Kuwait Petroleum Corporation – KPC
A fully integrated operation from well-head to petrol pump
KPC’s activities are carried out by 10 subsidiaries with distinct mandates.
KUFPEC is the International Upstream subsidiary of KPC
Domestic
International
• Kuwait Oil Company
– Domestic upstream
• Kuwait Gulf Oil Company
Upstream
– Focus on the Divided zone, offshore area
between Kuwait and Saudi Arabia
• Oil Development Company
• Kuwait Foreign Petroleum
Exploration Co. (KUFPEC)
– International upstream
– Award and manage the OSC (Operational
Service Contracts) with the IOCs,
specifically for the Northern Kuwait fields
Midstream/
services
• Oil Sector Services Company
– Construction and security services for
KPC and its subsidiaries
• Kuwait National Petroleum Company
– Domestic downstream
• Kuwait Aviation Fuelling Company
Downstream
– Aviation fuel facilities servicing over 1,500
aircraft per month with a 30 million litre
storage capacity
• Petrochemical Industries Company
– Fertilizers and petrochemicals
• Kuwait Oil Tanker Company
– One of the largest fleets for marine
transportation fuel in the Arab world
• Kuwait Petroleum
International Ltd
– International downstream
– Refining and marketing in 7
European countries
– Aviation fuel sales network in Asia
– In Sweden it is the largest petrol station
operator (28% market share)
KUFPEC Overview
• KUFPEC: Kuwait Foreign Petroleum
Exploration Company, a wholly owned
subsidiary of KPC
• 30 Years of expertise in E&P activities
(Established in 1981)
• An international company engaged in
exploration, development & production of
crude oil and natural gas out side Kuwait
• Participates in joint ventures with similar
companies in E&P of Oil and Gas both as
an operator and partner
• 2010 Net profit : 143 MMUS$
• 2010 revenue exceeded 1000 MMUS$
KUFPEC
KUFPEC Assets Portfolio
China
UK – North Sea
Philippines
Tunisia
Malaysia
Egypt
Indonesia
Mauritania
Australia
Congo
Sudan
Yemen
Pakistan
Vietnam
Total Projects: 50 Projects in 14 Countries
Project Type: 22 Production \ 5 Development \ 23 Exploration
KUFPEC Area Offices
Five
Regional
Offices
Egypt: Cairo
Tunisia: Tunis
Pakistan: Islamabad
Indonesia: Jakarta
Australia: Perth
2030 KUFPEC’s Strategy Direction
2030 Strategy _ Reserves-MMBOE
2030 Strategy _Production-MBOPED
900
250
750
200
600
150
450
100
80
130
200
200
200
50
300
350
430
650
650
650
2010
2015
2020
2025
2030
150
0
0
2010
2015
2020
2025
2030
• Preference for investments which facilitate technology and capability transfer between
domestic and international upstream businesses
• Achieve and maintain optimal ratio of oil & gas in international upstream portfolio
• Become operator of international upstream assets
KUFPEC Production (kboe/d)
Strategic Opportunity Choices
Exploration
Ground-floor with partner, preferably not Deep Water
Asset acquisitions
Main focus
Corporate
Acquisitions
Looking into Corporate deals since market getting
better.(seller/buyer expectation gap narrowed)
Oil vs. Gas
No preference. Portfolio ~ 80% gas
Geographic Location
Preferably around KUFPEC producing assets, but open to
new country entries (Ex: Vietnam 2009)
Pro / re-active
Strong preference for pro-active opportunities
Operatorship
5% of production by 2015 (6 kboe/d)
Unconventional
To be reviewed. (Ex: Shale Gas)
Partners
Technically competent IOCs / NOCs
Technology Transfer
Heavy Oil, gas, HTHP
Opportunity workflow Model
Business Development Challenges
External
Strong Competition
Especially from Asian NOCs. Public Bidding
processes generally attract 4-8 serious bidders.
Oil Price Instability
Leads to an “expectation gap” between sellers and
buyers. Slows down M&A activity (2009).
Opportunity availability
KUFPEC to use the K-strengths and relationships to
generate pro-active opportunities.
Limited Exploration
opportunities
Either small or expensive (Deep Water).
Internal
Manpower
More high quality technical staff required
Current & Potential BD “K” Corporation
Think K – Grow K
Oil
Ministry
help in relationships with other NOCs & Ministries
(Exs: Pertamina, Petronas, ONGC, EGPC)
KPC
Excellent help through Shell ETSA relationship.
Potential to “use” Marketing relationships
KPI
Excellent ongoing co-operation on Vietnam, Indonesia,
China and Egypt (ongoing)
KOC
Excellent ongoing cooperation.
Used Shell ETSA relationship to get access to an Asset
Acquisition in Pakistan.
Scope for more with other IOCs
KGOC
Potential to build on Chevron relationship (ongoing)
PIC
Potential for co-operation
KIA
Potential for co-operation