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This presentation gives insights into Kuwait’s oil sector. It examines the expansion of the sector and the tremendous opportunity it presents for oil and gas investors to capitalize on the market situation in Kuwait, which is looking for expansion and competing with the oil rich Middle East countries to stay afloat. The need to adopt global sourcing by Kuwait’s oil and gas companies is highlighted.
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January 25, 2013Procurement Consulting – Brickwork Sourcing
Kuwait's Oil and Gas Sector – Expanding PotentialKuwait's Oil and Gas Sector – Expanding Potential
Brickwork India (Confidential)
www.brickworksourcing.comwww.brickworksourcing.com
Kuwait’s estimated proven oil reserve stands at 104 billion barrels.
Kuwait harbors about 8% of the world's oil reserves.
Kuwait ranks 4th among oil producing countries worldwide.
The Kuwaiti government derives 95% of its fiscal budget from oil revenue.
The Kuwait government derives 80% of its income from the oil sector.
The oil sector contributes 52% of Kuwait’s GDP.
The bulk of Kuwait's oil is located in the Burgan field, south of the capital Kuwait City.
Kuwait has three oil refineries – Shuaiba, Mina Abdullah and Mina al-Ahmadi with a total refining capacity of 930,000 barrels per day.
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Current Scenario
Kuwait Petroleum Corporation (KPC) which is the largest oil company in Kuwait and a state-owned entity is responsible for Kuwait’s hydrocarbon interests throughout the world.
KPC is spearheading a US$340 billion investment master plan to transform the nation’s energy policy. In the next five years, KPC is due to spend US$90 billion on oil and gas projects.
With soaring oil revenues and a 15% year-on-year rise in oil receipts in 2012, Kuwait is set to emerge stronger even in comparison to other competing oil rich countries in the Middle East.
Most of the investments in Kuwait’s oil and gas sector is likely to be in upstream activities with a scheduled expenditure of over US$ 55 billion.
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The Future Road
There is an increased need for local exposure and foreign direct investment in Kuwait’s oil and gas sector.
Although Kuwait’s oil and gas sector is a closed market and is also the hardest market to penetrate, it has however seen a lot of contracts and sustained growth.
The major oil and gas projects in store for Kuwait call for advanced technology and oil wells and the need for technological support and increased investments in R&D.
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Growth Drivers and Opportunities
Market Potential
Kuwait is in a comfortable situation as it deals with a low fiscal break-even price in oil at US$ 44 per barrel which is even less in comparison to Saudi Arabia at US$ 72 per barrel.
Kuwait has seen increased revenues on the back of soaring oil rates, for example, during April-November 2012 alone the revenues stood at US$76.7 billion with 10% increase in oil production observed. This would indicate that there is huge potential in this sector for growth.
There is tremendous opportunity for oil and gas investors to capitalize on Kuwait, which is looking for expansion and installing measures to become competitive with the more established Middle East leaders in this sector. FDI is essential for Kuwait to see accelerated growth. Brickwork Sourcing works with global oil and gas companies and has the capability of providing end-to-end sourcing, vendor and supply chain management solutions.
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“The information contained in this document that includes text, graphics and links, are provided on an “as-is”, "with all faults" and "as available" basis and are without warranty of any kind. While Brickwork relies on sources that are believed to be reliable, it cannot rule out errors in judgment or application. The document is intended for “information” and “general guidance” purposes only.” Investment decisions and/or other decisions based on the conclusions and potential strategies mentioned in the document are not necessarily endorsed by the Brickwork management.”
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About Brickwork Sourcing
Brickwork is the pioneer of the Virtual Office business. We provide virtual support for businesses across the globe. Our well informed Remote Sourcing Analysts (RSAs) can provide support at any or all stages of your sourcing lifecycle. Your Virtual Sourcing Office can be a large team of analysts supporting large companies with established procurement processes or a one-man-show to function as your entire procurement office.
Disclaimer
THANK YOUTHANK YOUContact:[email protected] Sanjeeth HegdeIndia: +91 (80) - 4040 – 9999 (218 Ext)
12 April 2023
www.brickworksourcing.comwww.brickworksourcing.com
