Kuwait

Kuwait

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Exploration and Production

Chevron’s long record of developing crude oil and natural gas in the Middle East dates back to our earliest discovery, in Bahrain in 1932. Kuwait’s Burgan Field, the world’s second-largest onshore oil field, was discovered in 1938 by Gulf Oil, which later merged with Chevron. Following nationalization of this field by the government of Kuwait, Chevron subsidiaries continued to provide assistance to the Kuwait Oil Company through technical-service agreements through 2008.

The Chevron-led consortium competing to develop Kuwait’s northern fields ended in May 2010. However, Chevron has an extensive history in the region and continues to be active in Kuwait, and we are one of two partners in the onshore Partitioned Zone (PZ) between Kuwait and Saudi Arabia.

Maximizing Resources in the Partitioned Zone

Companies that later became part of Chevron have been producing oil on behalf of Saudi Arabia in the onshore PZ since 1949. Chevron has an agreement with Saudi Arabia to operate the kingdom’s 50 percent interest in the hydrocarbon resources of the onshore PZ. The agreement was extended and amended in 2009; it now expires in 2039.

During 2013, development drilling, well maintenance and numerous facility-enhancement programs were under way in the onshore PZ and are scheduled to continue in 2014. The work is expected to partially offset declines in overall production from the Humma, South Fuwaris, South Umm Gudair and Wafra fields.

In 2009, steam injection began at the Large-Scale Steamflood Pilot (LSP) Project for the carbonate First Eocene reservoir at the Wafra Field. Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, which reduces its viscosity and allows its extraction through wells. This project was preceded by steam stimulation of some wells, followed several years later by a small-scale test. The entire development project is designed to determine the technical and economic viability of thermal-recovery projects in the Eocene reservoirs of the Wafra Field. In 2013, work continued on the steam injection pilot project in the target reservoir and achieved thermal maturity, which means steam was injected into the reservoir, and a steam zone developed, resulting in significant recovery of oil. This is the first time a carbonate reservoir has successfully recovered heavy oil using a conventional continuous steam injection concept.

The LSP project required drilling injection wells, producing wells and observation wells while installing facilities for water treatment, steam generation and distribution.

In September 2013, front-end engineering and design began for expansion of the LSP Project to the Second Eocene carbonate reservoir. Startup is expected by the end of 2014.

Development planning also continued on a full-field steamflood application in the Wafra Field. Front-end engineering and design work for the first area of the Wafra Steamflood Project is expected to begin in 2015. The area is expected to reach maximum total daily production of 80,000 barrels of crude oil. This would mark the first commercial application of conventional steamflooding in a carbonate reservoir anywhere in the world.

A carbonate reservoir is an oil or gas trap formed in reefs, dolomite and certain types of limestone. Typically, carbonate reservoirs are highly fractured and not conducive to steamflooding on a large scale. However, the carbonate Eocene reservoirs at Wafra have favorable properties that are promising for successful steamflooding.

Front-end engineering and design continued on the Central Gas Utilization Project in 2013. The project is intended to make the use of natural gas more efficient and eliminate natural gas flaring at the onshore PZ fields. A final investment decision is expected in late 2014.

Refining

Under an agreement signed in 2003 with the Kuwait National Petroleum Co. (KNPC), Chevron’s technical, operational and managerial employees shared their knowledge with employees of the KNPC’s three refineries. That agreement ended in 2010.

Chevron licenses refining technology and supplies catalysts to KNPC refineries through our affiliates Chevron Lummus Global LLC and Advanced Refining Technologies LLC, respectively.

Shipping

Saudi Arabian Chevron (SAC) operates a storage and marine export facility at Mina Saud in the PZ.

In 2013, we marked our 11th consecutive year with no reductions or delays in scheduled tanker loading, no lost-time incidents and no spills attributable to SAC operations. A total of 56 tankers were loaded at the company’s crude oil shipping terminals, handling a volume of nearly 39 million barrels of Ratawi and Eocene crude.

Updated: May 2014

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