Kuwait, Opec’s fifth-largest crude producer, said it has discovered “huge commercial quantities” of oil and gas, which is a breakthrough in the Gulf state’s push to boost its hydrocarbons reserves. The announcement comes as the country reported a multibillion deficit for the upcoming fiscal year.
Preliminary estimates suggest the latest discovery at the Al-Nokhatha field east of the Kuwaiti island of Failaka, could yield about 2.1 billion barrels of light oil and 5.1 trillion standard cubic feet of gas, which corresponds to approximately 3.2 billion barrels of oil equivalent, according to the Kuwait Oil Company.
“These initial findings indicate huge potential to further enhance and increase hydrocarbons resource quantities in various layers and reservoirs within the discovered field,” KOC said in a statement on Sunday carried by state news agency Kuna.
The initial estimated area of the newly discovered oil well is around 96 square kilometres and the reserves are equivalent to the country's entire production in three years, chief executive of KOC parent, Kuwait Petroleum Corporation, Sheikh Nawaf Al-Sabah said in a video posted on the company’s account on X.
The daily production of from Al-Nokhatha well is about currently 2,800 barrels of light oil and 7 million cubic meters of associated gas.
“Based on initial test results, a development plans will be established to commence actual production from the field at the earliest opportunity, boosting KOC’s production capacity,” the company said.
Government expenditure
Kuwait, which relies heavily on sale of hydrocarbons to fuel its economy has benefited from a rise in oil prices this year, but the government still needs to control spending to cut its budget deficit.
Kuwait's budget is projected to show a deficit of 5.6 billion dinars ($18.33 billion) for the 2024-2025 fiscal year, with expenses estimated at 24.5 billion dinars and revenue at 18.9 billion dinars, Reuters cited Kuwait’s Ministry of Finance as saying on Sunday.
Government spending must be fixed at 24.5 billion dinars in the 2027-2028 budget to control budget growth, it added.
The liquidity of the General Reserve Fund, from which the budget deficit is financed, decreased to 2 billion dinars last March from 33.6 billion ten years ago due to increasing withdrawals, the ministry said.
Regional discoveries
Kuwait’s announcement is the latest in the string of the discoveries made by the other member of the GCC, which accounts for the about a third of the world’s proven oil reserves.
Saudi Arabia, Opec’s biggest oil producer, earlier this month said it has discovered seven oil and gas deposits in the kingdom's Eastern Province and Empty Quarter.
State-run energy company Saudi Aramco discovered “two unconventional oilfields, a reservoir of light Arabian oil, two natural gasfields, and two natural gas reservoirs”, Saudi Press Agency said at the time, citing Energy Minister Prince Abdulaziz bin Salman.
The Al-Ladam unconventional oilfield, located in the Eastern Region, was discovered after an exploratory well produced oil at a rate of 5,100 barrels per day, along with about 4.9 million standard cubic feet of gas daily.
The Al-Farouk unconventional oilfield, also in the Eastern Province, was identified following the flow of Arab ultralight oil from the Al-Farouk-4 well, producing 4,557 bpd of oil along with about 3.79 million standard cubic feet of gas per day.
Meanwhile, at the Unaizah B/C reservoir, located in the Mazalej area, the Mazalej-62 well started producing light Arabian oil at a rate of 1,780 bpd.
Two natural gasfields and two reservoirs were also discovered in the Empty Quarter, a large desert expanse covering the southeastern part of the country.
The kingdom did not quantify the aggregate estimated oil and gas reserves through the new discoveries.
In May, Sharjah discovered new gas reserves in the onshore Al Hadiba field.
The emirate, however, did not reveal the volumes of gas discovered as it has yet to test the field located north of the Al Sajaa Industrial Area in Sharjah, which has “promising quantities” of gas reserves, the Sharjah Government Media Bureau said at the time.
Though, the last hydrocarbon’s discovery in Kuwait is seemingly bigger than the recent string of reserves discovered elsewhere in the region, it is smaller than those announced in the past few years.
In 2020, the UAE announced 80 trillion cubic feet of shallow gas reserves in an area straddling the emirates of Abu Dhabi and Dubai, the biggest find in 15 years.
The Turkmen gasfield – the world's second-largest – was discovered in 2005 and is estimated to hold about 500 trillion cf of gas.
The announcement followed, Adnoc’s discovery of additional reserves of 7 billion “stock tank” barrels of oil, 58 trillion cf of conventional gas and 160 trillion cf of unconventional gas in November 2019.
The Abu Dhabi-controlled company in 2022, Adnoc announced further discoveries of natural gas in Abu Dhabi’s Offshore Block 2 exploration concession operated by Eni.
The discovery indicated one trillion to 1.5 trillion (scf) of raw gas, almost doubling the discovered field volume, from the initial finding to 2.5-3.5 trillion scf.
The demand for natural gas in the coming decades is expected to rise globally amid decarbonisation efforts, according to the Gas Exporting Countries Forum.
Global demand for natural gas will rise to 5.36 trillion cubic metres in 2050 from 4.02 trillion cm in 2022, the GECF, a 19-member intergovernmental platform of gas exporters, said in its global gas outlook report in March.
Demand is expected to rise by 1.5 per cent per annum from 560 billion cm in 2022 to 855 billion cm by 2050, driven by economic growth and demographic trends as well as plans to displace oil products in power generation to cut emissions.
Total global gas production is also forecast to grow by 33 per cent to reach 5.3 trillion cm by 2050, with the Middle East region adding 465 billion cm during the period.
Like the other oil-producing countries in the Middle East, Kuwait is the looking to boost its crude oil and natural gas production.
Last year, Kuwait announced plans to raise its oil production capacity to 3.15 million barrels per day with in the next four years, from 2.7 million bpd level at that time.
Kuwait, which has the world’s seventh-largest oil reserves, said it will its natural gas output by about 79 per cent to 930 million cfpd in the same period, as it set the refining capacity target of 1.45 million bpd.
The country aims to achieve crude oil production capacity 4 million bpd by 2035 and maintain until the end of the next decade, according to Kuwait Petroliul Corporation 2040 strategy.
The company aims non-associated gas production in Kuwait to reach 2 billion scfpd by 2040.
