Established in April 1981 by its parent company Kuwait Petroleum Corporation (KPC), Kuwait Foreign Petroleum Exploration Company (KUFPEC) is an international upstream company, engaged in exploration, development and production of crude oil and natural gas outside the State of Kuwait
KUFPEC is active in 15 countries spanning five continents: Australia, Asia, Africa, North America and Europe.
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KUFPEC’s FEAR, one of the three regions of the Operations Directorate, has continued to progress oil and gas development projects and new interest purchases while managing the declining production in existing fields within the Region. Overall net production within FEAR has decreased from 15,936 boepd during 2014 to 12,874 boepd during 2015. The decrease in FEAR net production over the year was mainly dominated by several reasons, namely: Mutineer/Exeter shutdown due to Floating Production Storage and Offloading (FPSO) dry docking (back on production mid-July), lower Balnaves production due to various facility and subsurface factors, as well as the Linda platform incident which led to a complete shutdown in the Gas production of Harriet Joint Venture late 2015.
The highlights of 2015 include the progress made on the Wheatstone liquefied natural gas (LNG) project in Australia, both in the upstream and downstream sectors. Examples of this progress consist of the installation of the Steel Gravity Structure (SGS) and Platform topside, along with the continued construction of the onshore plant and facilities. Most of the Phase One Julimar/Brunello wells were drilled and completed, with the seabed flowline installed. KUFPEC farmed into a new exploration block (WA-483-P) covering promising prospects and with an upcoming exploration well to be drilled. In block WA-481-P, three exploration wells were drilled within budget and without any HSE incidents, KUFPEC also made the decision to relinquish (license expiry) its fully operated block in WA-427-P after extensive technical and commercial assessment showed that renewal with a required drilling commitment could not be supported. KUFPEC China Inc. (KCI) opened a new office in Shekou, China on the first of December 2015 and commenced hiring Chinese national staff.
WA-49 - (KUFPEC 35%)
The WA-49 production license contains the Balnaves oil development project and the Julimar/Brunello gas development project.
In the Julimar/Brunello gas development project, gas production scheduled to start up in 2017 will be transferred to the Wheatstone LNG project in which KUFPEC holds 13.4% equity. The WA-49 joint venture has completed the subsea installation campaign where both production and cross-over manifolds were successfully installed. The project achieved Ready for Use (RFU) on 13 September 2016 with the completion of all construction and commissioning activities.
The FPSO contract for the Balnaves oil development was terminated in March 2016 due to breach by the FPSO contractor. The FPSO was disconnected and sailed away on April 2016. Accordingly, the joint venture has commenced decommissioning and abandonment of the Balnaves subsea infrastructure. No future production is anticipated from this field.
WA-46, 47 and 48 - (KUFPEC 8%)
The WA-46, WA-47 and WA-48 blocks contain the Wheatstone/Iago gas development project. The Wheatstone/Iago gas field will be produced to the Wheatstone LNG project. During the year, all planned production wells for the Wheatstone/Iago gas fields were successfully drilled and completed. Gas production is scheduled to start in 2017 along with the Julimar/Brunello WA-49 license gas production.
Wheatstone LNG project - (KUFPEC 13.4%)
During 2016 good progress was made in the Wheatstone LNG project, both in the upstream and downstream sectors, including subsea installations and completion of LNG tank-1.
WA-26/27 and WA-54 - (KUFPEC 37.5% Mutineer/Exeter, 50% Fletcher and 37.5% Finucane)
Oil production during 2016 was 3,048 boepd. Finucane and Fletcher wells were shut-in due to a subsea communications fault from August to October 2016. Oil production was reinstated following implementation of the Viper LIMS (Line Insulation Monitoring/Management System).
WA-191 - (KUFPEC 37.5%)
Exploration permit WA-191 was renewed on 22 June 2015 for a period of five years. The permit is currently in Year Two with a permit year commitment of G&G studies.
Harriet Joint Venture - (KUFPEC 19.28%)
The Harriet Joint Venture is a mature asset and maintains a unique position as a processor of gas from other joint ventures such as the East Spar joint venture. With more than 20 years of production, the existing fields are currently in steep decline with offshore abandonment activities continuing throughout 2016.
WA-483 - (KUFPEC 40%)
The 2016 work program for exploration permit WA-483 consisted of G&G studies aimed at maturing the prospectivity for drilling under the low oil price environment. Accordingly, the planned drilling prospect “Swell” was deferred to 2017.
WA-71 - (KUFPEC 47.5%)
In 2016 KUFPEC increased its equity in exploration permit WA-335-P from 18.9% to 47.5%. The WA-71 retention license was granted in first quarter 2016 to the WA-335-P joint venture over the Bunyip gas discovery. The remainder of the WA-335-P exploration permit was surrendered in October 2016.
WA-41 - (KUFPEC 33.3%)
The operator of the WA-41 retention license entered administration in early 2016, and accordingly the WA-41 Corowa Development Concept has not progressed through Front End Engineering Design (FEED) and any subsequent Final Investment Decision (FID).
WA-8 - (KUFPEC 42.63%)
Production license WA-8 was renewed on 8 November 2010 for a period of 21 years. Final pre-stack depth migration products were delivered to the joint venture in 2016 supplementing the 2015 acquired Davros Multiclient broadband 3D survey. The work program for 2016 consisted of purely G&G studies for maturing the prospectivity.
WA-356 - (KUFPEC 35%)
Exploration permit WA-356 is currently in the final year of the five-year renewed term. Work program variation to swap a Year Five drilling commitment to licensing of newly acquired Davros Multiclient broadband 3D seismic was approved in early 2016. The seismic was delayed and consequently the joint venturers have applied for a 12-month suspension and extension to Year Five in order to allow time for evaluating the seismic and formulating a proper work program for a March 2018 renewal.
SC14C Galoc Field - (KUFPEC 26.84%)
The Galoc Field produced a net average of 1,263 boepd to KUFPEC during 2016. The production was steady during 2016 with normal decline. All wells were running and producing steadily throughout the year with minor maintenance and planned shutdowns. The joint venture approved proceeding with the Galoc-7 exploration well drilling in 2017.
13-1 Yacheng Field - (KUFPEC 30%)
The Yacheng field produced a net average of 2,755 boepd to KUFPEC during 2016, compared to the net average of 4,058 boepd in 2015. This decline is mainly due to the shut-in period required for repairing the Hong Kong pipeline and the natural decline of the field. In May 2016, Phase II of the Hong Kong pipeline repair was completed 35 days ahead of schedule and under budget due to a well-planned project execution. The tie-in/out for Wenchang and Golan along the Hong Kong pipeline was completed during the period of pipeline repair. Workovers for two wells were completed in June 2016 and were back on stream. An insurance claim for Hong Kong pipeline phase I repair commenced and is under process.
Block 63-13 - (KUFPEC 30% with exploration commitment 80%)
The PSC was amended to shift one commitment well from block 52/26 to block 63/13. The third exploration well was drilled ahead of schedule and under budget. The result was a dry hole and the joint venture completed all PSC commitments.
Block 52-26 - (KUFPEC 30% with exploration commitment 80%)
The PSC was amended to shift one commitment well from block 52/26 to block 63/13. KUFPEC proposed a one-year extension, which was endorsed by the regulatory authorities.
Block 52-22 (KUFPEC 30% with exploration commitment 80%)
One commitment well was drilled, resulting in a gas discovery that is currently under evaluation. KUFPEC proposed a one-year extension, which was endorsed by the regulatory authorities.