Kuwait Oil Field, World's Second Largest, 'Exhausted'

by James Cordahi and Andy Critchlow

RELATED NEWS:

Peak oil headlines - Nov 9...
Staring down the barrel of a crisis...
How to deceive friends and influence people: Oil crisis lies...
Peak oil - Nov 13...
Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse...
Nov. 10 (Bloomberg) -- Kuwaiti oil production from the world's second-largest field is ``exhausted'' and falling after almost six decades of pumping, forcing the government to increase spending on new deposits, the chairman of the state oil company said.

The plateau in output from the Burgan field will be about 1.7 million barrels a day, rather than as much as the 2 million a day that engineers had forecast could be maintained for the rest of the field's 30 to 40 years of life, said Farouk al-Zanki, the chairman of state-owned Kuwait Oil Co. Kuwait will spend about $3 billion a year for the next three years to expand output and exports, three times the recent average.

To boost oil supplies, ``Burgan by itself won't be enough because we've exhausted that, with its production capability now much lower than what it used to be,'' al-Zanki said during an interview in his office in Ahmadi, 20 kilometers south of Kuwait City. ``We tried 2 million barrels a day, we tried 1.9 million, but 1.7 million is the optimum rate for the facilities and for economics.''

Persian Gulf oil producers, which supply about a fifth of world demand, are rushing to find new reserves and build more pipelines and export terminals to compensate for declining output from older reservoirs. Any delay in replacing supplies may push oil prices higher and slow economic growth, the International Energy Agency said in a report this week.

To be sure, the plateau in supply if achieved would be higher than a projection from the IEA. This week the Paris-based group said output from the Greater Burgan area will increase from 1.35 million barrels a day in 2004 to 1.64 million a day in 2020, before falling to 1.53 million a day in 2030. The field now pumps between 1.3 million and 1.7 million barrels a day, al-Zanki said.

Sustainable Supply?

The debate over the sustainability of Middle East oil supplies has gained pace this year, after investment banker Matthew Simmons published ``Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.'' In the book, he asserted the practice of injecting water into Saudi fields may lead to rapid production declines. Saudi officials rejected the charge.

Brought into production in 1948, Burgan accounts for more than half of Kuwait's 96.5 billion barrels of oil reserves, or 55 billion barrels. Only Saudi Arabia's Ghawar oilfield, about 500 kilometers (313 miles) to the south, is bigger.

Benchmark New York oil futures have tripled in price during the last four years to a record $70.85 on Aug. 30 because countries such as Kuwait and Saudi Arabia haven't invested enough in expanding production capacity to keep pace with faster-than- expected demand from countries such as China, India and the U.S.

Kuwait last month pumped 2.5 million barrels a day, equivalent to 3 percent of global demand, according to Bloomberg data. That's down from a peak of almost 3 million barrels a day in 1972, according the Arab Oil & Gas directory.

``Kuwait's oil industry requires significant investment and needs international oil companies to help kick-start production capacity increases,'' Colin Lothian, senior Middle East energy analyst at Wood MacKenzie Ltd., an Edinburgh-based oil industry consultant, said in a telephone interview.

Burgan on its own had enough reserves to support 2 million or 3 million barrels of daily output, but those have already been produced, al-Zanki said in the interview two days ago. The reserves are declining and need to supplemented with other reservoirs, he said.

Revival Targeted

The family-ruled emirate plans to increase production capacity by about 18 percent to 3 million barrels a day by the end of the decade from about 2.55 million now, and to at least 4 million by 2020.

Oil consumers will be more reliant on Middle Eastern supplies in coming years and vulnerable to higher prices and slower economic growth should investments be delayed, the IEA, an adviser to 26 consuming nations, said in an annual outlook released on Nov. 7.

Petrofac Ltd. and rivals SK Engineering & Construction Co. won two contracts worth in more than $1.6 billion this year to upgrade and refurbish 20 plants that separate natural gas from oil ready for export in northwestern Kuwait. That works is in preparation to allow international oil companies to develop four oil fields near the border with Iraq.

``You need to develop more reserves in order to support the future target,'' said al-Zanki, who was appointed Kuwait Oil's chairman last year. Kuwait Oil is the country's state-owned monopoly oil and gas producer.

In a 10-year-old plan known as Project Kuwait, the emirate may invite companies such as Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc to invest about $8.5 billion to almost double output at the emirate's northern fields to 900,000 barrels a day by 2025. The project would be the first time since the 1970s that foreign companies operate Kuwaiti oilfields.

Crude oil for December delivery fell as much as 57 cents, or 0.97 percent, to $58.36 a barrel on the New York Mercantile Exchange today, after an Energy Department report yesterday showed U.S. stockpiles of crude were at their larges since July. Crude traded at $58.61, down 32 cents, at 10:45 a.m. in London.

--Editor: Evers (tjc, ldk)

Story illustration: {ETOP } for top energy news. For more Middle East stories see {NI MIDEAST BN }. For a graph of New York crude-oil prices over the past year, see {CL1 GP D }. To graph Kuwaiti oil production during the past 40 years, see {OPCRKUWA GP Y }

To contact the reporter responsible for this story: James Cordahi in Kuwait City (971) (50) 655 0476 or at cherifcord@bloomberg.net Andy Critchlow in Dubai on (+971) (4) 352 2116 or at acritchlow1@bloomberg.net

To contact the editor responsible for this story: Tim Coulter in London on (44) (20) 7330 7901 or at tcoulter@bloomberg.net

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Thanks to our friends at Global Public Media for tracking this article down, which is now unavailable except at the Bloomberg website. This version is an update of others which have been reposted elsewhere on the net. -AF

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
___

Current

. . News Ticker . . .

The cover story of the latest issue of Green Pages details how the Florida Greens are working with other anti-nuclear activists to prevent the licensing of three new reactors. With a pro-nuclear President in the White House, it’s critical that Greens work with activists around the country to defeat the idea that the answer to climate change is additional nuclear reactors.

In From Hopenhagen to Nopenhagen Brian Tokar of the Institute for Social Ecology states “After the 2007 climate summit in Bali, Indonesia, the Bush administration tried to initiate an alternate track of negotiations on climate policy that involved only a select handful of the more compliant countries … Now that the Obama administration has adopted essentially the same approach …”

Also included are articles on the upcoming mid-term elections and obituaries for Bob Long and Dennis Brutus. As always; read, comment, distribute.

Winter 2010

Features

Florida faces nuclear threat
by Michael Canney

Arizona Greens triumph in federal court
by Claudia Ellquist

Robert “Bob” Long, Green Pioneer (1917-2010)
by Mike Feinstein

Berkeley Peace and Justice Commission follows Ten Key Values
by Bob Meola

Cynthia McKinney receives international peace award

Elections

Fairfax, California’s Town Council: The Green Party Majority
by Mimi Newton

Green-Rainbow Party Sets Sights on 2010 Races
by Dave England

Dozens of candidates file for the Green Party primary in Illinois

World

Green Ideology and Its Relation to Modernity: Including a Case Study of the Green Party of Sweden by Michael Moon
Reviewed by Angela Aylward, Green Party of Sweden (Miljöpartiet de gröna)

From Hopenhagen to Nopenhagen
by Mike Feinstein

Opinion

A vision for the midterm
by Brent McMillan

A tale of party oppression at the local level
by Deyva Arthur, New York State Green Party

Evergreen

Poetic obituary for Dennis Brutus
Stone Hammered to Gravel by Martin Espada

Poetry Corner
Overtime by Jackie Sheeler

Green Music by Tom
by Barbara Rodgers-Hendricks

A summary review of Forever Pleasure, a utopian novel by Theodore R. Eastman
by Barbara Rodgers-Hendricks

Reports

State Reports

About the logo on the cover illustration

With radiating waves, a skull and crossbones and a running person, a new ionizing radiation warning symbol is being introduced to supplement the traditional international symbol for radiation, the three cornered trefoil.

The new symbol is being launched today by the IAEA and the International Organization for Standardization (ISO) to help reduce needless deaths and serious injuries from accidental exposure to large radioactive sources. It will serve as a supplementary warning to the trefoil, which has no intuitive meaning and little recognition beyond those educated in its significance.

International Atomic Energy Agency press release

The views expressed belong to the individual authors and do not necessarily reflect those of the Green Pages Editorial Board, nor of the GP-US. Those with opinions about any of the articles are encouraged to post comments. All comments are first reviewed to screen out spam, not content.

FAIR USE NOTICE - ALL information on this website is for educational purposes ONLY. (The Green Party of Delaware is not the same thing as Green Delaware.) This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: www.law.cornell.edu/ uscode/17/107.shtml.

If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Kuwait Oil Field, World's Second Largest, 'Exhausted'

RELATED NEWS:

Frieda Berryhill: Nuclear Power (;-/) :: Solar Power! (:->)

Current

Winter 2010