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New Solutions for the Energy Balance in Kuwait

Sami Al-Rushaid

Chairman & Managing DirectorKuwait Oil Company

Kuwait Oil & Gas Summit– February 2012Kuwait

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Kuwait is expected to see further increases in energy demand over the next twenty years

Strong increase in energy demand expected through 2030 Power demand is highly seasonal, peaking during summer Several sources of fuel will be needed:

Associated gas from additional oil production Non associated gas from new reservoirs Low sulphur fuel oil from heavy oil and new refinery Additional seasonal LNG imports

2005 (a) 2010 (a) 2015 2020 2025 2030

2628

3439

4349Primary Energy Demand Growth

MTOE

Annual Growth Rate

2005 - 2010 = 1.5 %

2010 - 2030 = 2.8 %

Sources: BP Statistical Review – IEA World Energy Outlook 2011

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• Reach 3.5 MMBOPD by 2015• Reach 4.0 MMBOPD by 2020• Maintain 4.0 MMBOPD through 2030

Maximize the Strategic

Value from Oil

• 1.2 BSCFD by 2015• 1.7 BSCFD by 2020• 2.2 BSCFD by 2025• 2.5 BSCFD by 2030

Realize the Potential of

Gas

Oil & Gas Production Strategic Objectives for KOC

What is KOC Contribution to BalanceKuwait’s Energy Demand?

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Maximize the Strategic Value from Oil

2010201120122013201420152016201720182019202020212022202320242025202620272028202920300

500

1000

1500

2000

2500

3000

3500

4000

Develop Heavy Oil production in North Kuwait

Focus on optimizing recovery through primary, secondary techniques

Incorporate new production from exploration

Develop EOR capabilities before 2020 to ensure production can be ramped up

KOC Oil Production Profile

3

MBOPD

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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 20300

500

1000

1500

2000

2500

Production Optimization

Heavy Oil

Oil from New Reservoirs, Production Optimization and Heavy Oil Development are Key for Growth

KOC Production Profile

Oil from new reservoirs

MBOPD

4

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Realize the Potential of Gas

The discovery of nearly 35 trillion SCF of free gas has triggered ambitious targets for its development

Associated gas production will also increase with oil production targets KOC is set to produce 4.0 BSCFD of gas by 2030, of which 2.5 BSCFD

will come from non-associated gas fields5

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Technology applications will be critical to optimize oil & gas production from existing and new reservoirs

Wara Waterflood Pilot

ESPs and VSDs

Multi port selector valve

Multilateral wells

High resolution seismic Horizontal / Multilateral wells Electric Submersible Pumps

and Variable Speed Drivers Multi-Port Selector Valves Waterflood projects Integrated Digital Fields

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Drilling multilateral wells will significantly contribute to production optimization First two multilateral wells drilled

in S&EK, providing larger access to reservoir from one hole

Both wells have a total potential of 8000 bopd

Six horizontal well pilots were successfully implemented in NK for heavy oil development

Under evaluation their use to produce heavy oil, together with steam injection

MG-0238

BG-0651

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Kuwait Integrated Digital Fields

Kuwait Integrated Digital Field initiative will allow KOC to optimize its production by Improving the flow of data and information Allowing more accurate and speedy decision making

This initiative will allow to increase our production by 7%

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Developing Heavy Oil Production Capacity

We expect to increase our Heavy Oil production to 60 MBOPD by 2016, and to 270 MBOPD by 2030

Extensive pilots with Cyclic Steam Stimulation are in place

Production with horizontal wells is also being piloted, providing opportunities for field development using both vertical and horizontal wells

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Liquefied Natural Gas: The Seasonal Gap Filler

Over next two decades, scenarios suggest seasonal summer surplus on global LNG supplies

KPC is analyzing several supply options from different countries

Kuwait has been receiving LNG supplies on ad-hoc basis

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Conclusions

Primary energy demand will continue growing in Kuwait. Scenarios indicate that a strong annual growth of 2.8 % can be expected through 2030

Several sources of fuel will needed to supply energy needs, including gas, fuel oil and seasonal LNG imports

KOC have a clear roadmap in place to supply Kuwait’s energy needs

New technologies are currently under implementation to ensure such supply of fuel needs

Seasonal LNG imports may be needed during peek energy demand during summer

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