KUWAIT - The Divided Zone.

The zone divided between and equally shared by Kuwait and Saudi Arabia, formerly known as Neutral Zone, contains the offshore field of Khafji discovered in 1959 which produces 28.2[degree sign] API oil from a Middle Cretaceous formation at a depth of 4,400 feet. The other offshore field there, Hout discovered in 1963, has Middle Cretaceous and Jurassic formations producing a mix of 33 deg. oils. Both the Khafji and Hout fields are connected to Saudi Arabia's Safaniyah, the largest offshore oilfield in the world.

There are the two offshore oil wells, the Lulu group, to the east. The group are said to contain nearly 1 bn barrels of oil found in a Middle Cretaceous formation, believed to be connected to Iran's Esfandiar field.

There are also three gas wells at Dorra, said to contain more than 35 TCF of non-associated gas in a Middle Cretaceous formation. In the same area, another Middle Cretaceous formation is said to contain about 163m barrels of oil. These oil and gas deposits are yet to be developed by the operator, Arabian Oil Company (AOC) of Japan.

The onshore oilfields in the Divided Zone are Wafra (discovered in 1953), where 18.9-23.5 deg. API oils have been produced from Middle and Lower Cretaceous formations; South Umm Gudair (discovered in 1966) which is an extension of Umm Gudair, producing 24.3 deg. oil and Lower Cretaceous formation, and South Fuwaris (discovered in 1962) producing 25 deg. oil from Middle and Lower Cretaceous formations. These oils are very sour, with 3.5-4% sulphur. The operator, Texaco, has found lighter oils in other formations which it has developed in recent years (see Part 2).

The Reserves: After March 1991, Kuwait's proven recoverable oil reserves were put officially at 96.5 bn barrels, including 2.5 bn barrels in Kuwait's share of the Divided Zone. These figures, unchanged by early 1999, were based mostly on a 1985-87 re-evaluation of earlier reserves data and estimates of recovery factors.

Before August 1990, the official estimate of Kuwait's recoverable oil reserves including its share of the Divided Zone was 97.1 bn barrels. This meant Kuwait only lost 600m barrels of oil as a result of both Iraq's torching of about 800 oil wells in February 1991 and Kuwaiti production since then. But independent experts said in April 1992, after the well fires were put out, that Kuwait may have lost "billions of barrels" of oil burned. Total oil in place is said to be in excess of 200 bn barrels.

The re-rating of oil reserves began in 1984, after the new oil discoveries (see OMT), when KPC raised the total to 92.7 bn barrels compared to 67 bn in 1983. In 1987 it raised the total to 94.57 bn barrels. On Jan. 1, 1990, its official estimate was 97.1 bn barrels.

Proven reserves of natural gas, including Kuwait's share of the Divided Zone, have been officially estimated at 52.4 TCF, compared to about 46 TCF in early 1990. Most of these reserves are associated with oil. Reserves of gas also contain substantial amounts of liquids.

Kuwait has long suffered from a shortage of natural gas, in view of a decrease in oil production in most of the 1980s. Its search for non-associated gas in deep Khuff formations did not bear good results. In 1987, a 400 MCF/day pipeline supplying Kuwait with associated gas from southern Iraq came on stream.

Before Iraq's 1990 invasion of Kuwait, it was calculated that every 1m b/d of Kuwaiti heavy crude oil was producing about 500 MCF/day of gas. To boost the gas yield, KPC's upstream unit Kuwait Oil Co. (KOC) in 1989 raised the production of Marrat's lighter oil which has a higher gas yield. New technology developed by Santa Fe was applied to the Marrat system, which boosted gas production.

The chemical composition of gas from the "Burgan 2" field usually has a high percentage of ethane (20%) and propane (14%). It has the richest propane content of all Middle East gases. This advantage had encouraged Kuwait in the early 1970s to build a major LPG export system. The system consisted of three units each with a capacity to process 16 MCM/day.

The chemical composition of gas associated with "Burgan 1" field is roughly as follows: 55% methane, 17% ethane, 10% propane, 3% N-butane, 1.2% isobutane, and 1.5% pentane. Its calorific value is 1,300 BTUs per cubic foot. To compare, "Burgan 2" gas has a calorific value of 1,450 BTUs per cubic foot, and is composed of: 65% methane, 20% ethane, 14% propane, 4.5% N-butane, 2% isobutane, 2.6% pentane, 1% N2, 1.5% CO2, and 0.1% H2S.

Gas is used for the LPG export plants, oilfield operations, power generation, water desalination, and the production of ammonia, cement, and petrochemicals. Demand was rising rapidly in the 1980s and KPC wanted to secure additional supplies of gas from abroad. Most of Kuwait's non-associated gas is believed to be of poor quality, however. This was one reason behind KPC's decision to base its petrochemical complex (on stream since late 1997) on naphtha, LPG, and other liquids from associated gas.