KUWAIT - 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 2005, 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 (see background in Vol. 56, Gas Market Trends No. 21).

Proven reserves of natural gas, including Kuwait's share of the Divided Zone, have been estimated at 3.11 TCM, compared to about 0.82 TCM in 1983. 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. But supplies were cut off when Iraq invaded Kuwait in August 1990.

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, 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 LPG plants, field operations, power and water desalination plants, and production of cement, fertilisers, and petrochemicals. Demand was rising rapidly in the 1980s. KPC wanted to secure additional gas from abroad. Most of Kuwait's non-associated gas is of poor quality. This was one reason behind KPC's decision to base its petrochemical complex on naphtha, LPG, and other liquids from associated gas. Now Kuwait is hoping to import gas from Iran and Qatar through marine pipelines.

Foreign Help: The upstream oil sector in Kuwait is functioning better than in July 1990, the month before Iraq's invasion which led to serious damage in the fields and related facilities. Major improvements were made in the past 14 years thanks to help from Western companies, mainly US firms, contracted by KOC. New oil gathering centres have been installed in the main fields. Now foreign contractors are installing gathering centres in the southern and northern fields (see profiles in Part 2 next week).

Santa Fe is among drilling companies working in this sector for KOC. Since 1991 Santa Fe has drilled many new wells and worked over existing ones. Santa Fe's Rig 180, the largest in the Middle East and able to drill to 30,000 feet, began operations in June 1999.

Most of the foreign contractors are from the US. Bechtel has managed the first two phases of reconstruction and rehabilitation work for the entire oil sector since March 1991. Parsons has managed the third phase and has been responsible for all of KOC's projects under a contract first signed in 1993 (see Vol. 56, Gas Market Trends 21).

KPC in 1992 opened the upstream sector for participation by foreign firms. But this was limited to service contracts, while the companies involved were hoping to have production sharing agreements (PSAs). Kuwait's constitution, however, does not allow concessions or PSAs.