highlights of operations
Chevron maintains an important business relationship with Kuwait.
Our operations are in the onshore Partitioned Zone (PZ), an area between Kuwait and Saudi Arabia. Joint Operations—staffed and funded equally by Saudi Arabian Chevron Inc. and the Kuwait Gulf Oil Co.—explores for and produces crude oil and natural gas in the onshore PZ. The production from these operations is shared equally among both countries.
In addition, Chevron Kuwait Limited maintains a business development and liaison office in Kuwait City as we continue to seek new ways to share our energy expertise in Kuwait.
Globally, Chevron and Kuwait are important strategic trading and investment partners. For example, Kuwait Foreign Petroleum Exploration Company is a partner in the Chevron-led Wheatstone natural gas project in Australia and recently increased its share in the project.
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 Corp., 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 via technical-service agreements through 2008.
The Chevron-led consortium competing to develop Kuwait’s northern fields ended in 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 PZ between Kuwait and Saudi Arabia. Saudi Arabian Chevron represents Saudi Arabia’s interest in the area, and Kuwait Gulf Oil Co. represents Kuwait’s interest.
Maximizing resources in the partitioned zone
Companies that later became part of Chevron have produced 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 expires in 2039.
In 2009, steam injection began at the Large-Scale Steamflood Pilot Project for the carbonate First Eocene reservoir at the Wafra Field. 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 properties that are promising for successful steamflooding. Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, which reduces its viscosity and enables 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 2015, the company made progress on a 3-D seismic survey covering the entire onshore Partitioned Zone. It is one of the largest land seismic programs ever undertaken, covering 1.1 million acres (4,600 sq km).
Beginning in May 2015, production in the PZ was halted as a result of continued difficulties in securing work and equipment permits. As of early 2016, production remained shut in, and the exact timing of a production restart was uncertain and dependent on dispute resolution between Saudi Arabia and Kuwait. When production resumes, additional development drilling, well workovers and numerous facility-enhancement programs are expected to partially offset field declines.
The shut-in also affected plans for both the Wafra Steamflood Stage 1 Project, a full-field steamflood application in the Wafra Field First Eocene carbonate reservoir with a planned design capacity of 100,000 barrels of crude oil per day, and the Central Gas Utilization Project, a facility construction project intended to increase natural gas utilization while eliminating natural gas flaring at the Wafra Field. Both projects have been deferred pending dispute resolution between Saudi Arabia and Kuwait.
Chevron licenses refining technology and supplies catalysts to Kuwait National Petroleum Co. (KNPC) refineries through our affiliates Chevron Lummus Global LLC (CLG) and Advanced Refining Technologies LLC. Advanced Refining Technologies has a minority interest in the Kuwait Catalyst Company.
CLG has licensed residuum desulfurization technology for two large KNPC projects—the new Al-Zour refinery project in 2006 and the clean fuels project at the KNPC’s Mina Abdullah and Mina Al Ahmadi refineries in 2007. Both projects are currently in the engineering, procurement and construction phase.
Saudi Arabian Chevron operates a storage and marine export facility at Mina Saud in the PZ.
In 2015, 21 tankers were loaded at the company’s crude oil shipping terminal, handling more than 12.6 million barrels of crude from the Ratawi oil field and the Eocene reservoir. The crude was loaded and shipped without any lost-time incidents or spills.
Chevron markets Caltex®-branded lubricants and coolants in Kuwait through authorized distributors.
in the community
Chevron supports programs that benefit education, the training and development of Kuwaiti nationals, the environment, and nongovernmental organizations in the communities where we operate.
Saudi Arabian Chevron and the Kuwait Gulf Oil Co. co-sponsored one of Kuwait’s first surveys of plants and wildlife. Conducted by the Kuwait Institute for Scientific Research, the survey yielded valuable data and insights into the plants and wildlife in the vicinity of Joint Operations at Wafra. The program is part of Chevron’s commitment to environmental stewardship, which includes conserving biodiversity.
record of achievement
Chevron played a major role in developing the resources of Kuwait and the Middle East. Gulf Oil Corp., which became part of Chevron in 1984, discovered Kuwait’s supergiant Burgan Field in 1938. The discovery helped transform Kuwait into a top oil producer. As a 50 percent owner of the Kuwait Oil Co. (KOC), the company was involved in the production and management of Kuwait’s oil fields.
In 1968, we began licensing refinery technology and supplying catalysts to KNPC refineries and have since licensed several hydrocrackers and residuum desulfurization units at their Mina Abdullah, Mina Al Ahmadi and Shuaiba refineries,
Under a 1994 agreement with the KOC, Chevron subsidiaries provided technical expertise for the continued development of the Burgan Field. The KOC agreement expired in 2008.
From 2003 through 2010, Chevron had a contract with the KNPC to share technical, operational and managerial knowledge with employees of the KNPC’s three refineries.
Chevron, the Kuwait Gulf Oil Co. and their respective predecessor companies have operated four oil fields in the onshore PZ since 1949, in keeping with a 1922 Neutral Zone Agreement through which Kuwait and Saudi Arabia share the natural resources jointly. In 2009, the 60-year agreement between the Kingdom of Saudi Arabia and Chevron predecessor Getty Oil Co. was amended and extended for another 30 years. Under the agreement, Chevron operates the kingdom’s 50 percent interest in PZ petroleum resources.
Getty Oil Co. became part of Texaco in 1984, and Texaco merged with Chevron in 2001. The Kuwait Gulf Oil Co. operates Kuwait’s 50 percent interest in the PZ.
In 2004, we celebrated a milestone when the onshore PZ’s operations surpassed 3 billion barrels of production. More recently, we entered the third phase of the long-term staged testing process for determining the technical and economic feasibility of using steamflooding to increase production from the onshore PZ’s Eocene heavy oil reservoirs.
health, environment and safety
Chevron is committed to a safe work environment and has achieved impressive results in the PZ. During 2015, employees and contractors of Saudi Arabian Chevron at Mina Saud and Wafra logged more than 9 million work-hours without a day-away-from-work injury and drove 6 million miles without a major crash.
Chevron is committed to improving the quality of life of all our employees and in the communities where we operate. For example, our PZ hospital and operations field clinic recorded some 10,000 visits by employees, their families and other community members in 2015.
With regard to environmental stewardship, Joint Operations has made significant progress in its Zero Discharge Initiative. The aim of this program is to eliminate surface disposal of water from production and to remediate former water collection areas to international standards. By the end of 2015, 95 percent of the former pit area was reclaimed, and there was zero discharge of water from production under normal operating conditions. Remediation is currently ongoing.
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Certain terms, such as "unrisked resources," "unrisked resource base," "recoverable resources," and "oil in place," among others, may be used to describe certain aspects of the company's portfolio and oil and gas properties beyond the proved reserves. For definitions of, and further information regarding, these and other terms, see the "Glossary of Energy and Financial Terms" on pages 50 and 51 of the company's 2015 Supplement to the Annual Report. As used in this report, the term "project" may describe new upstream development activity, including phases in a multiphase development, maintenance activities, certain existing assets, new investments in downstream and chemicals capacity, investment in emerging and sustainable energy activities, and certain other activities. All of these terms are used for convenience only and are not intended as a precise description of the term "project" as it relates to any specific government law or regulation.All trademarks, service marks, logos and trade names, whether registered or unregistered, are proprietary to Chevron, its affiliates, or to other companies where so indicated. You may not reproduce, download or otherwise use any such trademarks, service marks, logos or trade names without the prior written consent of the appropriate owner thereof.