January 12, 2022 oil and gas

73 projects in Wafra, Khafji joint zones allegedly cancelled


KUWAIT CITY, Jan 11: According to reliable oil sources, about 73 projects that were scheduled to be implemented in five years in the joint operations area – Wafra and Khafji, with 48 projects in the joint Wafra area and 25 in the joint Khafji area – were canceled in 2020, reports Al-Rai daily. They estimated the total approved budgets for these projects by the Kuwait Gulf Oil Company at more than KD 400 million. The sources said, “Out of the canceled projects, 36 were canceled due to production stoppage, and 15 for not being approved or were canceled by the relevant committees and authorities, or due to a decrease in their priority”.

Reasons
They explained that there are various reasons for canceling 11 projects, either to convert the project to an operational one, or to update the special budget, or to find temporary solutions instead of implementation, or to cancel the project after the tests showed the lack of safety of the equipment and therefore the project became no longer needed. Other reasons were that the value was modified, or due to lack of coordination between the various concerned departments or change in the scope of work.

Also, there are projects that have been canceled due to the emergence of alternatives that are less costly in the long term, or to implement them within other projects or restudy them for modernization and reassessment of the need for them. The sources indicated that there is an agreement between the partners in the joint operations areas – the Kuwait Gulf Oil Company and the Saudi partner – on the importance of filtering capital projects and classifying them according to priority in line with the targeted production rates and strategic goals through meetings and workshops to agree on their importance and the extent of their need. Regarding gas flaring, they said, “In the Khafji joint operations area, work is underway as soon as possible on gas export projects by the two partners. This will raise the material and environmental returns.

With regard to the joint Wafra operations area, official approvals have been obtained to move forward with the project to establish a gas assembly center and the establishment of an export line and a fuel gas import line to process it for the two partners in two phases”. The sources affirmed that the first stage is the establishment of a gas assembly center that is produced in the joint Wafra operations area, which is expected to be completed in mid-2024, and the second is to send the assembled gas to the Kuwait Oil Company to benefit from it instead of burning it, which achieves environmental requirements.

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