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Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation Lafayette, Louisiana “Doing Business with Kuwait Oil Company”

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Presentation on theme: "Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation Lafayette, Louisiana “Doing Business with Kuwait Oil Company”"— Presentation transcript:

1 Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation Lafayette, Louisiana “Doing Business with Kuwait Oil Company”

2 Agenda 1.KOC Strategy 2.Drilling Activities 3.KOC’s Portfolio of Major Projects for Int’l. Contractors 4.Business Opportunities

3 KOC Strategy

4 Kuwait Foreign Petroleum Co. Kuwait Oil Company Kuwait National Petroleum Co.Oil Development Co. Petrochemical Industries Co. Kuwait Gulf Oil Co. Oil Sector Services Co. Kuwait Aviation Fueling Co. Kuwait Oil Tankers Co. Kuwait Petroleum International KPC Companies

5  To explore, develop and produce to marketable quality the hydrocarbon resources in the State of Kuwait.  To safeguard our people and the environment.  To conduct our business in accordance with government policy, good reservoir management practice and by using the most efficient and economic means available. Mission

6 Achieve a leading global position in Upstream Oil & Gas as an integrated, value- driven enterprise, by:  Maximizing the strategic value from oil  Realizing the potential of gas  Growing reserves for a sustainable future  Being an employer of choice  Realizing value from technology  Strengthening our commitment to HSSE  Striving for excellence in performance, and  Contributing to the Enterprise and State. Vision

7 Key Feature of our Strategy Achieve the following production targets 3.0 MMBOPD by MMBOPD by MMBOPD by 2020 and maintain it until 2030 Develop Heavy Oil Produce 600 MMSCFPD of free gas by 2010/2011 and increase to 1,000 MMSCFPD by 2015 Pursue aggressive exploration program including the offshore.

8 Challenges Developing high pressure high temperature complex gas reservoirs Develop heavy oil to reach 450 MBOPD by 2030 Skilled and Experienced Manpower Water Management Technology Environmental issues

9 2 - Drilling Activities





14 14 ServicesContractors Cementing Halliburton DowellSchlumberger BJ Services, USA National Petroleum Services Co. Int'l Serv. Company Int'l Serv. Company Int'l Serv. Company Local Mud MI, Baroid Halliburton Baker Hughes Egyptian Mud Engineering Co. Int'l Serv. Company Int'l Serv. Company Int'l Serv. Company Regional Directional Drilling, MWD & LWD Anadrill Schlumberger Sperry Halliburton Baker Hughes Weatherford Int'l Serv. Company Int'l Serv. Company Drill Bits Baker Hughes Reed Smith Varel Int'l Serv. Company Int'l Serv. Company Coring DBS Halliburton CorproInt'l Serv. Company Mud Logging International Logging (Weatherford) GeologInt'l Serv. Company Gyroscopic SurveyGyrodata, USAInt'l Serv. Company Fishing & Tools Rental Smith International WeatherfordInt'l Serv. Company Tubular Inspection Al-Mansoori Engineering GENAPESCORegional Well Control & Snubbing Svcs Wild Well Control Hi Arctic Energy ServicesInt'l Serv. Company Turbo Drilling ServicesSmith InternationalInt'l Serv. Company

15 3 - KOC’s Portfolio of Major Projects for Int’l. Contractors

16 The projects are classified as: 1. Pipeline projects (3 Nos.) 2. Gas projects (2 Nos.) 2. Injection projects (3 Nos.) 3. Safety & Instrumentations (4 Nos.) 4. Electrical projects (3 Nos.) Major Infrastructure Projects (coming 2 years)

17 Pipeline Projects (1/2) FUTURE PROJECTS (Cont’d.) EF/1713  Installation of Low Sulphur Fuel Oil (LSFO) pipe line from MAA to Sabiya Power Station and Fuel Gas Line (LPG to Doha/Sabiya & NK Fields)  Tender issue – Sep-09  Installation of 170 Km LSFO Line 1x24” from Al-Ahmadi Refinery to North Kuwait Power Stations (Doha & Sabiya). Also, installation of a new cross country pipeline (2x48”) fuel gas (approximately 170 km each) from LPG plant at Al-Ahmadi Refinery to supply NK power stations & NK KOC facilities complete with pumping, metering system, and corrosion monitoring. EF/1760  New Gas Oil Pumping Station at MAA with Pipelines from MAA to Azzour and Shuaiba Power Stations  Tender issue – Sep-09  Install New Gas Oil Pumping Station with VSD & install a new Gas Oil Pipeline 1x18” from Al-Ahmadi Refinery to south Kuwait Shuaiba Power Station (5 Km) with metering station. Also, installation of 2X40” Fuel Gas Lines (65km each) from MAA to Azzour Power Station.

18 EF/1727  A New 30” Crude Oil Transit Line (TL-4)  Tender issue – Oct-09  Extension of Point A manifold in North Kuwait and installation of a new 30” cross country pipeline (approximately 120 km) from Point A to the new Central Mixing Manifold. The Pipeline will have sectionalizing valves and leak detection system and metering station.  With all associated Instrumentations and Electrical works. Launchers & Receivers. FUTURE PROJECTS (Cont’d.) Pipeline Projects (2/2)

19 Gas Projects (1/2) EF/1719  Construction of a New BS 132 & enhancement at BS-131 NK  Tender issue – Apr-09 (Under Evaluation)  Provision of a new grass root gas Booster Station, BS132 in North Kuwait. BS132 will have a single train of 250MMSCFD capacity, including LP1, LP2 and HP compressors followed by gas dehydration. Each compressor will have its own gas turbine driver. The new BS132 is designed to operate in parallel with existing gas booster station BS131, taking suction from the NK LP gas network from GC’s 15, 23, 25 & 24 at approximately 10psig and discharging into the existing export system at approximately 925psig.  The enhancements of existing BS131 to include new LP and HP inlet separators, control and instrumentation upgrades (including cross communication with BS132) and provision of new HP and LP flare knock out drums and flare stacks.  New tank vapour centrifugal compressor at each of the existing gathering centres GC15, GC23 and GC25.  14 new pipelines to interconnect between GCs and Booster station ( 8” to 48”) 10km in length. FUTURE PROJECTS (Cont’d.)

20 EF/1718  New Booster Station BS-171 – WK  Tender issue – Aug-09  The project scope shall consist of Engineering, Procurement, Construction, Commissioning of a new grass root Booster Station (BS-171) in west Kuwait, will comprise three new identical two stage compressor trains (LP & HP), including gas & condensate dehydration trains. Each train shall be capable of processing 125 MMSCFD sour gas, from Gathering GC-17, GC-27, GC-28 and future GC-16. One TV compressor capacity 6 MMSCFD at GC-27. One TV compressor capacity 8 MMSCFD as spare, at GC-28. The above includes significant quantity of inter-connecting pipelines including a manned Mid-Stream Slug Catcher facility. FUTURE PROJECTS (Cont’d.) Gas Projects (2/2)

21 Injection Projects (1/3) FUTURE PROJECTS (Cont’d.) EF/1071  Effluent Water Injection Ph-I NK & Central Sea Water Injection PH II NK  Tender issue – Nov-09  Collect and transfer effluent water from GC-15, 23 & 25 to an expanded Central Injection Pumping Facility (CIPF). Expand Sea Water Treatment Plant from 300 – 500 MBWD. The project include the expansion of the following plants: - GC- 15, 23 & 25, Sea Water Treatment Plant (SWTP), Central Injection Pumping Facility (CIPF) and the tie-in of GC-24’s Effluent Water pipeline to the CIPF. The SWTP is located on the coast at Sabriyah and connected to the CIPF via a 48Km 36” link line.

22 FUTURE PROJECTS (Cont’d.) Injection Projects (2/3) EF/1772  Wara Pressure Maintenance Project (WPMP)  Tender issue – Feb-10  This project is required to provide pressure support for Wara formation in the Burgan field. The Wara Project includes a new water treatment facility taking 1,000,000 BWPD of produced water directly from existing Balance Tanks at Effluent Water Disposal Plants I & II, after treating it is transported via a high pressure (2200 psig) pipeline to 200 injection wellheads. The 200 new water injection wells are required to meet sub-surface needs for water injection through 22 manifolds (average 10 wells per manifold). The synopsis of scope consist of : 20 – Tanks ranging from 10,000 BBLs to 240,000 BBLs 60 – Pumps, ranging from 175 BHP to 3900 BHP 10 - Water Treatment Units, Induced Gas Flotation Units. 700 Km of Pipeline Systems, Various Sizes ranging from 6” to 30”. Location near GC 14.

23 FUTURE PROJECTS (Cont’d.) Injection Projects (3/3) EF/1761  Effluent Water Injection Plant Ph-II NK  Tender issue – Jan-11  This project is required to provide pressure support for Sabriya & Raudhatain fields in NK. To achieve this it is required to provide injection facility with a capacity of 500 MBWPD by the year 2013/2014. This project has a dual purpose of pressure maintenance and environmental objective. Effluent water will be collected from 4 oil gathering centers GC’s 15, 23, 25 & 24 in NK. The facility will comprise of water collection, treatment and injection at pressures between 2400 psig and 3700 psig in a total of 150 injection wells utilizing approximately 250 KM of pipelines ranging from 6” to 30”.  Tanks MBWPD  Pumps 15  Water treatment facilities 1

24 EF/1605  SCADA for all Wells in SEK Field  Tender issue – Apr-11  To install SCADA at all SEK wellheads (approx 1122 wells) to control, measure & transmit wellhead (tubing & casing as applicable) pressures and flow lines pressures. In addition adequate provision 20% for future wells & provision of spare RTU & SCADA System at 14 GCs. Safety & Instrumentation Projects (1/2) FUTURE PROJECTS (Cont’d.)  Installing Surveillance Systems, Access Control Systems and Intruder Detection Systems at (96) sites that includes Gathering Centers, Booster Stations and other facilities of the Company distributed across the Kuwait oil fields and can be considered a scheme of National scale. The integrated security system will provide monitoring and control functionality at (4) Regional Asset Security Centers and a Central KOC Security Center which shall be built as part of this project. The scope of work will include design, supply, installation, configuration and commissioning of a 1300KM Fiber Network that shall provide connectivity to over 2500 cameras, security management systems, alarm monitoring stations and access control systems. EF/1700  Integrated Security system in all KOC Facilities  Tender issue – Jul-09

25 Electrical Projects (1/2) FUTURE PROJECTS (Cont’d.) EF/1763  New 72 MW Raudhatain “D” Substation  Tender issue – Aug-10  New 132 KV Main Intake Substation Raudhatain "D" of (72 MW) capacity to run 200 Electrical Submersible Pumps (ESP) including installation of 11 KV Switchgears, transformers, O/H lines, power & control cabling to downstream company S/S etc. in Raudhtain fields. EF/1764  New 72 MW Sabriya “B” Substation  Tender issue – Aug-10  New 132 KV Main Intake Substation Sabriyah "B" of (72 MW) capacity to run 300 Electrical Submersible Pumps (ESP) including installation of 11 KV Switchgears, transformers, O/H lines, power & control cabling to downstream company S/S etc. in Sabriya fields.

26 FUTURE PROJECTS (Cont’d.) Electrical Projects (2/2) EF/1600  Enhancement to Substations and Control Rooms at SE&K GC’s, BS’s, NTF & STF and Replacement of M52 Substation at MAA  Tender issue – Apr-11  The main objective of this project is the safe operation of the oil facilities demonstrated in reconstruction of a number of existing substations and control rooms in a way that would provide the necessary safety for personnel and equipment. This objective will be accomplished by the following: 1] Construct two story elevated, blast proof control rooms, and maintenance offices for 9 company oil/gas facilities (7GC's 1,3,6,7,8,20 & 21 & 2 Boosters stations). 2] Construct safe, elevated, centralized electrical Substations / switch rooms with advanced equipments at 19 locations through out SEK fields (14 Nos. SEK GC's and Booster Station 140 and 150, NTF,STF & M52). 3] Power Distribution SCADA for SEK field including SCADA control room.

27 4 - Business Opportunities

28  KOC is responsible of major upstream operations in Kuwait.  KOC runs and maintains Ahmadi City.  KOC owns and manages Ahmadi Hospital (Southwell)  Current Live contracts exceed 600 # valued over 20 Billion US$  Current tenders exceed 250 Nos. valued over 15 Billion US$ under different stages of bidding  KOC total staffing of 6,000 employees.  Works and Services are entirely outsourced.  KOC relies on reputable contractors and vendors to support its activities, objectives and long term strategies Current Opportunities

29 Selection of proven / reputed manufacturers Products meeting specification, quality and delivery schedules. Approved Vendors benefit from Direct / Indirect Procurement opportunities Vendors/ Manufacturers

30 Approved Categories  No. of Main Categories (125)  No. of Sub Categories (112)  Total No. of Approved Manufacturers (1606)  No. of Countries (48)  No. of Approved USA Manufacturers (237)

31 Minimum Requirements: Prequalification limited to manufacturers (not assembler/ system integrator) Minimum 5 years of proven experience. Own design, manufacturing & testing capabilities Accreditations such as: ISO/ ASME/ API/ HSE/ NB & Type Test Report from Internationally recognized testing agencies like: KEMA / BSI etc. Past experience with IOCs / ISPs for last 5 years. Audited Financial Statements for 2 yrs in accordance with IFRS Minimum Requirements for Vendors

32  KOC implements OPEN ONGOING prequalification  Quarterly monitoring of companies’ performance.  Annual verification of financial capabilities of approved companies  Poor performance of companies entail Q-listing.  Pre Qualification Types PQ for existing categories of Works/ Services PQ for Specific Projects (on case to case basis) PQ for Companies Offering New Technologies PQ of Contractors, SPs & Consultants

33  Major EPC Contracts (> US$ 500 million)  Large EPC Contracts (US$ million)  Medium EPC Contracts (US$ million)  Small EPC Contracts (< US$ 50 million)  Construction of Mega Tanks  Offshore Support Services  Onshore Oil and Gas Pipeline Projects  General & Specialized Inspection Services  Surface Well Testing  Offshore Drilling Rig Services  Shallow, Medium and Deep Drilling Services  Full Maintenance Services of Production Facilities Categories for Int’l. Companies

34  Maintenance of Fire Fighting Systems  Slick Line Services  Dredging Works  Marine Operations Services  HSE Consultancy Services  Tubular Inspection & Internal Corrosion Services  Mud (Products, Engineering & Logging) Services  Rock Properties & Fluid Analysis Services  ESP, Ultrasonic ILI & Repair of Sub-sea Pipelines  Integrated Security Systems Categories for Int’l. Companies (cont’d.)

35 Establishment of KOC e-Tendering with support of Microsoft Register and update profile online View KOC Tenders and categories of works Download Tenders and PQ Documents Access to commercial documents Security and Confidentiality The Company encourages companies to get to know KOC and participate in its upcoming Tenders KOC looks forward to international companies’ future presence and sharing of business opportunities in Kuwait e-Tendering Portal

36  KOC carried out series of improvements with respect to its manner of conducting business.  Enhancement of KOC’s Lump Sum Turnkey (LSTK) Model Contracts for Major Projects.  KOC witnessed increased participation of international EPC contractors in Company’s tenders.  The areas for improvement were identified jointly with International Contractors/ Consultants.  The Enhanced LSTK model contract introduced in 2006  The feedback obtained has been extremely positive.  Benefits from increased participation encouraged KOC to pursue wider improvements in Terms & Conditions of Contracts. Enhancements to Contracts’ Terms & Conditions

37 Summary of Enhancements:  Sharing of Bidding Fees  FEED Verification Pre/ Post Award of Contract  Improvement to Bank Guarantees/ Bonding requirement.  Enhanced Contractor’s Cash Flow  Non-incorporated Joint Ventures / Consortia  Limitation of Liability  Clear process for Variations  Performance/ Schedule Incentives  Currency & Commodity Price Fluctuations  Enhanced Claims Handling  Alternative Dispute Resolution General Improvements:  Re-allocation of risks to party best able to control that risk  Risks allocated in line with international norms  More ‘user-friendly’ structure, terminology and language  Better administration Enhancements to LSTK Contract Model

38  Most producers are under pressure to increase production.  Many international Contractors are unwilling to bid for projects on a lump-sum turn-key (“LSTK”) basis.  KOC has reacted to such market demands.  Two (2) phases for the development of the following Four (4) alternative EPC Model Contracts:  Phase (I):Re-measurable ModelCompleted Cost Plus Model  Phase (II):Cost Plus Convertible Model Cost Plus (FEED by Company) Early Production Facilities Model Two Envelope Bidding System Alternative Contracting Options


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