Overview

Kuwait is a major oil supplier and a member of the OPEC consortium. Oil comprises nearly half of Kuwait’s GDP, around 95% of exports, and approximately 90% of government revenue. Kuwait holds approximately seven percent of global oil reserves and has a current production capacity of about 3.15 million barrels per day.
 
The Kuwait Petroleum Corporation (KPC) has announced its intention to increase oil production capacity to 4 million barrels per day (mmb/d) by 2020. In addition, KPC has announced intentions to increase natural gas production to four billion cubic feet per day by 2030.  Future production increases will depend on actual implementation of several upstream projects including the development of heavy oil capacity of 60 thousand barrels per day. KPC has announced an approximately $115 billion investment plan to be executed between 2015-2020 that is divided roughly equally between the upstream and downstream sectors. Thirty percent of the invested amount will be on local content.
 
Current refinery projects include the “Clean Fuels Project,” which will upgrade and expand the Mina Abdulla and Mina Al-Ahmadi refinery complexes. Kuwait National Petroleum Company (KNPC) has awarded the Clean Fuel’s engineering, procurement and contracting (EPC) contracts to three international consortiums. U.S. company Fluor has been awarded the Mina Abdullah package II contract, worth $3 billion. In addition, KNPC awarded four packages in 2015 to build the country’s fourth refinery, which will produce low-sulfur fuel oil for the country’s power plants. These two mega projects, Clean Fuels and the Fourth Refinery, are jointly expected to exceed $30 billion. In 2016, the Kuwait Supreme Petroleum Council approved the Al-Zour Oil Complex Project which is expected to cost $30 billion. Recently Kuwait  incorporated a new KPC subsidiery “Kuwait integrated Petrochemical Industries Company – “KIPIC”). The new company will manage the refinery, petrochemicals and LNG import operations in the Al-Zour complex. The complex will be formed by integrating the Al-Zour Refinery (under construction) with the planned Petrochemicals Complex (project cost: $10 billion) and a gas supply facility (project cost: $4 billion).
 
U.S. oil companies, manufacturers, and suppliers of oil field equipment have always experienced strong receptivity in the Kuwaiti market. KPC primarily uses American Petroleum Institute standards in their requests for proposals, which benefits U.S. manufacturers and suppliers. The Kuwait Oil Company (KOC) has an aggressive procurement division eager for U.S. technology.

 Oil Production (Million/Barrel/Daily)

	2015	2016	2017	2018 (Estimated)
Total Local Production	2,867	3,000	2.702	2,954.3
Total Exports	2,764	2,764	1,970	2,128.2
Total Imports	0	0	0	0
Imports from the US	0	0	0	0
Total Market Size	121	254	*732	*826.1
Average Oil Price ($/Barrel)	60	46	50	61

Data Sources:
1. Mathematical formula (Total Market Size = (Total Local Production + Total Imports) – (Total Exports) 
2. Organization of the Petroleum Exporting Countries (OPEC)
3. Kuwait Ministry of Oil

Opportunities

* Kuwait consumes about 300-350 mb/d for power generation and other needs, the remaining are exported as petroleum products.
Although Kuwait does not allow private sector investment in the upstream oil market, the oil and gas sector will continue to be a leading sector for U.S. businesses in the future. Best prospects in this sector include, but are not limited to: consulting services, Engineering, Procurement and Construction (EPC) services, refining technologies, environment consultants, control and instrumentation systems, and secondary recovery systems. The demand for drilling services and equipment will be strong due to Kuwait’s goal of increasing its oil and gas production capacity over the next ten years by developing heavy oil fields and offshore. A pipeline is also planned as well as other petrochemical production facilities. KOC pre-qualifies manufacturers for critical categories of products. Prequalification applications can be obtained against a net payment of USD 50 through telex transfer to KOC’s Bank Account No. 50112130301 [SWIFT CODE: NBOKKWKW] with National Bank of Kuwait, Ahmadi Branch, Kuwait, for “each product category”. Upon receipt of your transfer confirmation, issued by your bank along with the products for which documents are required, KOC forwards the necessary documents to the vendor by courier. Vendors are also advised to provide their full street address, as courier services do not accept consignments with P.O. box address.
 
Alternatively, prequalification applications can be obtained by a manufacturer’s local agent in Kuwait against Cash Payment of KD 15 (nonrefundable) from Room No. 15, located in the Purchasing building, KOC Industrial Area, Ahmadi, Kuwait.

Web Resources

For additional questions on the oil and gas sector, please contact Commercial Specialist Dina Al-Shawa at Dina.Al-Shawa@trade.gov.

• Kuwait Oil Company (e-tendering)
• Kuwait National Petroleum Company
• Kuwait National Petroleum Company eSourcing