50e-kpcworld - kuwait petroleum corporation

In This IssueQuarterly Magazine

Issue No. 50, October 2009

KPC MissionKuwait Petroleum Corporation (KPC), fully owned by the State of Kuwait, is one of the world’s major oil and gas companies. It is focused on petroleum exploration and production, refining, marketing, petrochemical production & sales, and transport. KPC’s mission is to manage and operate these integrated activities worldwide in an efficient and professional manner. In addition, KPC is committed to growing shareholder value, while ensuring the optimum exploitation of Kuwait’s hydrocarbon resources. KPC has an important role in contributing to the development of the Kuwaiti economy, developing a national workforce, maintaining superior commercial and technical expertise, and pro-actively managing the environmental, health, and safety aspects of KPC’s businesses.

22Hosniya Hashim: Success in Oil world needs a perseverant woman

The environmental fuel and its importance in the Kuwaiti refinement industry

14Leadership is the target KPC seeks to achieve

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The KPC World team would like to extend their appreciation to everyone who contributed editorial material, information, and photos for this magazine issue.

CorrespondenceP.O. Box: 26565, 13126 Safat, KuwaitFax: (965) 24994991Website: www.kpc.com.kwEmail: [email protected]

Talal Al-Khalid Al-SabahManaging Director, Governmental,Parliamentary, Public and Media Relations

Editor-in-Chief

Media Relations Dept.

Editorial Team

New successes in KNPC

26KNPC seeks to make the refinement capacity 1.5 million

30Ismail Abdullah: We seek to produce 500,000 barrels from West Kuwait

32The challenges of producing and developing heavy oil

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The Kuwaiti-Chinese relations and thirty-eight years of lucrative cooperation

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KPC exerts tremendous and constant efforts to support and reinforce its international status in the field of man-aging and utilizing hydrocarbons, implementing several policies in this domain to achieve this goal. Among these policies is its eagerness to seek out the best markets for its petroleum products, as well as its formation of part-nerships with international companies which can add ex-tra value to its foreign investments.Within a short period, KPC has managed to accomplish several noteworthy achievements, with the main one of these being its ability to attain a distinguished position in the East Asian markets, including India and Pakistan. In addition, it simultaneously succeeded in entering the Chinese markets, which were previously inaccessible to foreign investors for many years.Through implementing its policy of utilizing mutual stra-tegic needs to accomplish its numerous ambitions in China, the second largest oil consuming nation globally, KPC has managed to accomplish many of its goals there; this success is attributable in the main part to the excel-lent and distinguished relations between Kuwait and China, and the tremendous efforts made by our col-leagues in KPC’s China office, which was inaugurated in 2004.Given the continuous development of Sino-Kuwaiti rela-tions, Kuwait’s crude oil exports to China have increased, with Kuwait becoming one of the main countries export-ing crude oil to this Asian giant within the past few years. Due to the importance of China and its essential role worldwide, KPC World has regularly run articles shed-ding further light on Sino-Kuwaiti relations and inform-ing readers about the latest developments in diplomatic and commercial relations between the two countries, in addition to the significant role of KPC’s Beijing office.KPC World also has extensive coverage of the notewor-thy developments taking place in the Kuwaiti oil sector; among these issues is the Mina Abdullah facility’s great profitability, with profits from it reaching around KD 220 million, despite the recent worldwide economic crisis.This issue of the magazine also includes a report about the Gas Units Recovery project, which KNPC has taken over, which is one of the pioneering Kuwaiti environ-mentalist projects.

Editorial

Talal Al-Khalid Al-SabahManaging Director, Governmental,Parliamentary, Public and Media Relations

Demonstrating the oil sector’s en-thusiasm for improving and develop-ing the work environment for staff in all areas, Hashim Al-Refa’e, the MD of Oil Development Company and Chairman of the Gulf Project Insti-tute’s Board of Directors, recently hosted a seminar entitled ‘Projects and Risk Management.’The event, which took place at Pet-rochemicals Industries Company’s (PIC) Boubyan Club on Saturday August 8, was held under the patron-age of the institute’s Kuwait branch for the second successive time.A large number of managers respon-sible for KPC oil subsidiaries’ Risk Management programs attended the seminar.

Oil Development Co. MD hosts Risk Management seminar

Seminar offers chance to exchange expertise at regional, int’l levels

In his opening address, Al-Refa’e indicated that holding such semi-nars shows the institute’s eagerness to improve and develop the work-ing environment in all the oil com-panies’ departments. He said that such events help to reinforce the efficiency of risk management at both the intermediate and advanced levels within the oil sector, as well as providing those involved with an opportunity to exchange experience in this area.The senior official stressed the im-portance of holding such seminars on a regular basis, given their vital role in advancing and developing the utilization of the modern tech-niques deployed in managing such

projects in huge companies and vari-ous Gulf institutions. He added that they also offer an opportunity for those attending them to familiarize themselves with the most up-to-date methods and procedures utilized in this field regionally and internation-ally.After Al-Refa’e’s opening speech, Peter Wilson, a Specialist Consul-tant on Management Project with the US Flour Company, told the attendees that such seminars aim to enable participants to exchange views, experiences and lessons learnt from their practical application of risk management policies. Wilson also emphasized the positive results of holding such events.

Peter Wilson Iman Al-Gharballi Hashim Al-Refa’e

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Issue No. 50 October 2009

During his European tour to assess Kuwaiti oil investments in Europe, the Minister of Oil and of Information Sheikh Ahmad Al-Abdullah Ahmad Al-Sabah affirmed that the govern-ment is taking a great deal of interest in developing the Kuwaiti workforce, stressing that this is the country’s pri-mary and most important resource.While visiting Kuwait Petroleum Italy, which has an extensive fuel distribution station network and is considered one

system will be used for communica-tion within the oil sector.The new system represents the most up-to-date Internet communications application, allowing users to hold meetings and conferences from sever-al remote locations with high-quality visual clarity and resolution.The introduction of this technology is in line with KPC’s vision of develop-ing its IT systems and saving time, ef-fort and unnecessary expenditure on official external business trips.The new system also provides a unique and highly advanced way of conducting meetings and conferenc-es for attendees in different locations, offering all the advantages of the usual face-to-face meetings without

Under the auspices of KPC's CEO Mr. Saad Al-Shuwaib, KPC became the first in Kuwait to introduce the TelePresence video communication technology system. The cutting edge

KPC launches TelePresence technology

KGOC head announces new heavy oil

extraction strategyBader Nasser Al-Khashti, the chairman of Kuwait Gulf Oil Company (KGOC) has announced the introduction of a new, inclusive strategy, in cooperation with KPC to form a fourfold alliance, comprising KOC, KUFPEC, ODC and KGOC, to extract heavy oil and produce four million barrels per day (bpd) by 2030.Al-Khashti indicated that an explor-atory program was recently launched in the divided zone (between Kuwait

of the biggest refineries in the coun-try, Sheikh Ahmad Al-Abdullah said that the goal of Kuwaiti investment in the advanced industrial countries is not only to gain financial benefits, but also to help to develop Kuwait’s workforce. The Kuwaiti government is focusing on investing in the coun-try’s manpower, he said, since it con-siders this the most important Kuwaiti investment, which it prioritizes ahead of commercial investments.Commenting on Kuwaiti-Italian rela-tions, Sheikh Al-Abdullah explained that Kuwait’s fiscal investments are ex-tensions of its political relations, say-ing that these investments reflect the strong rooted-relations between the two countries. He also expressed his satisfaction at what these investments have achieved in Italy on the material, human and financial levels, voicing hope that these strong political rela-tions would be reflected not only at the level of investments in Europe, but also in other areas.

During his European tour to assess Kuwaiti oil investment

Ahmad Al-Abdullah: Our priority is to invest in the Kuwaiti workforce

those present having to leave their workplace.Al-Shuwaib praised the introduction of the TelePresence system and its ability to transmit users’ voices, facial expressions, eye movements and hand gestures, saying that the transmission of these details helped to bring more authenticity to remote meetings.This technology is a new leap forward in remote communications within the oil sector, said the CEO, adding that at the same time it meets KPC’s ur-gent need to provide a means of com-munication between staff regardless of their location or distance from one another. He asserted that the system would provide increased opportuni-ties for communication and partici-pation in meetings and conferences, as well as increasing productivity and performance in the oil sector.

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and Saudi Arabia), in cooperation with Saudi Chevron and Aramco, to enhance the capabilities and increase the extraction rate of oil reserves in the area. He also revealed that KGOC is currently drilling new wells in the offshore Al-Dorra field, and recently signed a deal with its Saudi partner to drill two wells in the Lulu field.

He further revealed that a project us-ing steam flooding in wells was re-cently launched, adding that it aims to increase the extraction rate by 30 percent, a significant increase on the current 5 percent extraction rate. He said that the success of this project, which marks the first time that this technique has been used in this sphere in Kuwait, would make the Wafra field a new oil resource.

Investment with int’l partners increases

opportunities to benefit from their expertise:

Hussein IsmailHussein Ismail, the chairman of KPI's board of directors and MD of the company, has revealed that the state-owned Kuwaiti and Chinese oil com-panies intend to choose international partners to participate in the establish-ment of a refinery and a huge petro-chemical complex which are report-edly set to be constructed in southern China by March 2010.

Ismail indicated the final decision on the international partners will be taken after receiving the approval of the Chi-nese authorities, represented by China’s National Development and Reform Committee, on the project, with work set to begin on it in the first quarter of 2010.Ismail predicted that the giant Europe-an Oil company “Royal Dutch Shell” and the US Dow Chemicals Co. might take part in the project, adding that the company has already begun basic nego-tiations with the major British oil giant, British Petroleum (BP). He said that they appreciate the interest that BP has shown in the project and location, as well as its eagerness to participate in the project and to submit a feasibility study on it, but added, “We will wait for its offer in order to study it.”He explained that the total cost of the project, including both the refinery and the petrochemical complex in Guang-dong, is around $ 9 billion. The project is considered the largest joint venture between China and a foreign investor to date, with the refinery’s productivity set to reach around 300,000 barrels a day once it is operational. The refinery has been designed particularly for the Kuwaiti oil provided by KPC and will be able to treat around fifteen million tons of Kuwaiti crude oil annually, or around 300,000 barrels per a day, in addition to an ethylene complex, with a projected productivity rate of around one million tons annually.Commenting on another Kuwaiti oil project, this time in Vietnam, Ismail said that KPC’s slogan is to work with local and international partners and on its external investments; doing so reduces the tension of risks, as well as providing an opportunity to benefit from international expertise in this do-main, he explained.Ismail who recently accompanied the Minister of Oil and of Information, His Excellency Sheikh Ahmad Al-Abdullah Al-Sabah, during a visit to Vietnam also revealed that 85% of the land prepara-tion operations for the $ 6 billion proj-ect located in Vietnam’s Nagi Sun area, have already been completed.

KPC’s new book highlights company’s

social roleKPC’s Media Relations Department has issued a book entitled ‘The so-cial Message,’ which aims to reinforce the abstract and material support that KPC gives to humanitarian causes in-side and outside Kuwait. The book also focuses on the Kuwaiti oil sector’s efforts to bring joy into people’s lives and to relieve the burdens of the dis-advantaged whose social circumstanc-es prevent them from enjoying a good life.Sheikh Talal Al-Khalid Al-Sabah, the MD of the Governmental, Parliamen-tary, Public and Media Relations, said that KPC pays a great deal of atten-tion to the issue of corporate social responsibility, adding that the deci-sion to publish the new book grew from KPC’s conviction of the im-portance of highlighting its role in interacting with social and charitable institutions.Sheikh Talal further revealed that the idea to publish the book had originat-ed from KPC’s senior administration’s eagerness to reinforce the role played by the oil sector in civil society insti-tutions, both in and outside Kuwait, including those in several other Arab and Islamic nations, as well as its par-ticipation in various other fields and the vitally important role that the Ku-waiti oil sector plays in protecting and supporting the Kuwaiti environment.

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A relationship based on mutual benefit and economic integration

The Republic of China is lo-cated in East Asia on the Pa-cific Ocean’s Western coast. Given its size of 9.6 million square meters, it is the third largest nation after Russia and Canada respectively in terms of area. Its biggest city is Shang-hai, while its capital is Beijing. The Chinese climate is gener-ally temperate with most of the country’s territories located in the moderate and sub-tropical zones; in the south, however, some of its regions are situ-ated in tropical zones, while its

northern regions are nearer to the frozen Siberian tundra.

The economic growthWithin the space of a few years, China has managed to attain a distinguished political, eco-nomic and military status. The country’s steady annual eco-nomic growth of between eight to 10 percent over the last 20 years has driven China’s keen-ness to obtain energy. According to energy information experts, over the last four years China has depended on oil to achieve 40 percent of its growth. Since China first became involved in the global economy in 1978, it has become clear that to main-

tain its rapid economic growth and accomplishment in devel-oping its civil and military tech-nology base and to guarantee its future success, it is essential that the country obtains the necessary international eco-nomic, technological and min-eral resources.In 2003, China surpassed Japan to become the second biggest consumer of petroleum prod-ucts in the world after the USA. In addition, China's oil con-sumption increased in 2004 to 15 percent, while its domestic oil production did not exceed two percent of its needs.

Kuwait and ChinaThe cooperation and economic integration between Kuwait and the Republic of China has witnessed remarkable and con-tinuous development since dip-lomatic relations between the two countries were first offi-cially launched in March 1971,

Kuwaiti-Chinese relations and 38 years of lucrative collaboration


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despite the fact that the begin-ning of the relations between the two countries predated this by six years, starting in 1965 when the late Sheikh Jaber Al-Ahmad Al-Sabah paid a visit to China when he was Finance Minister, and minister of Com-merce and Industry. During his visit, he met with the president of China, then Leo Shaw Chi, and a number of senior Chi-nese officials. From that time on, Kuwaiti-Chinese relations observably developed because the two parties were fully cog-nizant of their mutual strate-

gic need for one another. The nations, therefore, built up a successful and well-developed relationship based on mutual respect and common benefit, especially since Kuwait was the first Gulf country to be official-ly recognized by the Republic

of China and was among the first Arab countries which in-vested in both China’s private and public sectors, with con-structive cooperation achieved in 1990 between the two coun-tries through investments ap-proved by the Kuwaiti Fund for Economic Development in China which benefited around 32 projects. Among these proj-ects, the most important one was to grant China a facilitated loan to establish Shan Zee Han Airport. In addition, Kuwait approved other investments in the field of oil and gas, with the

Kuwait is now China’s eighth biggest crude

oil resource, rising from 17th place

previously

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Kuwaiti government signing a number of accords with China in oil, amongst them a $ 400 million contract between the China Oil Engineering Com-pany and Kuwait Oil Compa-ny (KOC) to establish two oil collection centers, which was signed at the end of Decem-ber 1995 in Kuwait. Another contract, this time to establish Jinicho Port via a flexible loan worth KD 6 million, was signed in February 2001.

KPC's China OfficeUnder the continuous develop-ment in China which has made it the second largest oil consum-ing nation in the world, Kuwait’s crude oil exports to the country

have steadily increased; as a re-sult, Kuwait has become one of the six primary oil exporters to this Asian giant.Due to the existing cooperation between the two countries, a number of steps have been tak-en to cement the mutual coop-eration in energy field; among these was the 2004 inaugura-tion of an office in the capital, Beijing, representing KPC.This inauguration was in line with the directives of HH the Amir Sheikh Sabah Al-Ahmad Al-Sabah following his visit to China as he stressed the neces-sity of extending cooperation with China in the energy field; KPC initiated practical steps to open the office soon after this, laying out the objectives it is expected to fulfill. The follow-ing are the goals that the office is tasked with accomplishing:• To carry out KPC's poli-

cy, which aims to expand the company’s interests in Southeast Asia, focusing

Cooperation ties were intensified after Sheikh

Jaber Al-Sabah’s visit in 1965


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particularly on China and India.

• To closely monitor the state of the Chinese market and submit the resulting analyses to KPC.

• To become familiar with opportunities to expand Kuwait's hydrocarbon sales within China.

• To strengthen KPC's status in the world’s second big-gest oil consuming nation.

Within a short time, KPC’s Bei-jing office managed to accom-plish numerous achievements compared to the company’s other offices in East Asia, estab-lishing a number of opportu-

nities to enhance KPC’s status in these major global markets and particularly providing sev-eral openings for KPC to attain its goals; heading these is the company’s wish to attain part-nership and cooperation with China through establishing refineries to refine Kuwaiti oil there, as well as a petrochemi-cal complex in Guangdong Province in China. As a result of these relations, China, rep-resented by the state oil firm

China achieved 40% of its economic

growth through depending on oil

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Sinopec Co., signed a number of accords with KPC, which was represented by its interna-tional arm, Kuwait Petroleum International (KPI), with Sino-pec taking all the necessary pro-cedures required to launch the joint project’s implementation. In addition, a team of interna-tional experts and consultants was formed to choose the ap-propriate location for the com-plex with the help of Chinese experts.Working closely with the senior administration of both KPI and Sinopec, the team recommend-ed Donghai Zetanjeng Island to establish the complex, con-sidering this the best location for that purpose.The report containing the fea-sibility and environmental im-pact studies carried out at the new location was submitted in August 2009 with the lo-cal government of Guangdong pledging to help in advancing the project’s implementation and to approve it as fast as pos-sible, especially since the basic cost estimates for the project stand at around $ 9 billion.

Work is expected to start on the project during the last quarter of 2009 and should be finalized in 2013, with possi-ble modifications to the origi-nal plan tailored to suiting it to the location.Before KPC opened its Bei-jing office, Kuwait was in 17th place among the countries exporting oil to China; since then, with the opening of the office and the sincere efforts of the young Kuwaiti staff work-ing there, Kuwait has risen to eighth place, with the rate of Kuwait’s crude oil exports to the country rising by an im-

pressive 500 percent in the past five years. As well as supplying refineries and power stations across China, the office has also played an important role in the process of providing its clients' head offices with crude oil. At the same time, the of-fice closely monitors the sale of Kuwaiti crude oil in the coastal zones in other Chinese cities, including Zenjhai, Kelo, Mwanig and Juangno.

KPC’s strategic objectives

KPC seeks to fulfill several ob-jectives through its partner-ship with China; among these, for example, is the aim of in-creasing its crude oil exports to one of East Asia’s and the world’s leading industrial na-tions, which is globally the second largest oil consumer. KPC also aims to produce oil products with new specifica-tions designed to cope with the continuous development in the energy field and also to enhance Kuwait’s status in the petrochemical industry, which is plainly developing fast, with great international demands being placed on it.


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Furthermore, the company aims to cement the relations between Kuwait as a crude oil-exporting nation and China, which has become one of the main global oil nations due to its tremen-dous economic growth.There is no doubt that the es-tablishment of KPC’s China of-fice is a tremendous additional asset to the company’s overseas office network in one of KPC’s biggest strategic markets, as well as providing a gateway for its subsidiaries since the office exerts immense efforts to en-hance KPC’s status in these ma-jor world markets. KPC and its subsidiaries have several oppor-tunities to accomplish Kuwait’s stated goals in this field; at the head of these is the objective of achieving partnership and cooperation with China repre-sented by establishing refineries to refine Kuwaiti oil. In fact, KPC’s office in China played a vital role in the signing of these accords with the Chinese side, in addition to realizing other unexpected achievements and successes, managing within a short time to establish direct operations to sell crude oil. The staff there have also played a major role in meeting with senior officials of several other oil companies to strengthen business relations and enhance Kuwait’s reputation as a major crude oil exporter.Anyone following the office’s activities will realize the impor-tance of the accomplishments which it has achieved in a fast-moving and complex market, with the nature of the Chinese market being totally different from that of the other Asian

markets where KPC has a pres-ence, such as Korea, Singapore, India, Bangladesh and Paki-stan.

Undoubtedly, this was caused by the Chinese market being closed for a long time to for-eign investments, as well as the severe competition among

oil-exporting nations to pos-sess the lion's share of the giant Chinese market.However, Kuwait’s strategy in China is to focus on ensuring long-term contracts and build-ing strong relations based on mutual respect and common cooperation with the clients. As well as being genuinely appreci-ated by the Chinese clients, this policy has helped to establish Kuwait as the most outstand-ing crude oil exporter to China, whose oil market has grown fast in recent years and looks set to continue growing.

The volume of Kuwait’s oil exports to China now stands at 5.36

million tons annually

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Al-Mutairi: The Environmental

Fuel project tops the priorities in Kuwait

Refinement Industry

Effective participation and teamwork spirit are the main factors behind Mina Abdullah

Refinery’s achievements


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Mina Abdullah Refinery is one of the leading Kuwaiti refineries in accomplishing achievements, not only at the level of the Ku-waiti oil sector, but at that of the GCC nations. In recent months, the refinery has attained several achievements in various fields, for example completing the imple-mentation of the ‘Accreditation Improvement Program,’ which aims to develop methods of work and accreditation inside the refin-ery. It also helped the refinery’s Inspection and Corrosion Divi-sion to attain ISO 1998-17020 certification; the first time that an Arab country working in the field of refining has attained this certifi-cation. The refinery also achieved a ‘Good’ insurance risk rating dur-ing the last field survey carried out by international insurance compa-nies. If it were not for the spirit of teamwork among refinery person-nel, these achievements would not have been possible. In addition to these achievements, the refinery’s administrative staff managed in a short period of time to under-

stand the psychological needs of the personnel employed there and have exerted themselves to meet these needs, as well as working to resolve all possible problems in or-der to facilitate more development and enhance the facility’s status.To find out more about the con-tinuing achievements and styles of modern industrial management, KPC World interviewed Eng. Mo-hammed Ghazi Al-Mutairi, the DMD of Mina Abdullah Refinery, who shed more light on its recent accomplishments, as well as talk-ing about the ambitions and hopes of the refinery personnel.At the start of his interview with the newsletter, Al-Mutairi empha-sized that the effective participa-tion of various sections and depart-ments at Mina Abdullah Refinery is the principal factor behind the achievements accomplished in re-cent years.He added that good planning, continuous follow-up, earnestness and the spirit of teamwork have greatly helped the refinery’s work, especially helping the Inspection and Corrosion Division to attain ISO 17020-1998 certification from UKAS, Mina Abdullah Re-

finery being the first refinery in Kuwait to achieve this certifica-tion. The Inspection and Corro-sion Division, meanwhile, man-aged to achieve ISO 2000-9001 recertification for the second suc-cessive time, attaining one part of the certification while carrying out an RBI program.He went on to say that the Process Engineering Division, represented by Technical Service Department personnel, also managed to achieve a remarkable accomplishment, in-stalling a pipeline which pumps diesel to HCR unit, with the main line producing diesel with a low quantity of sulfur through inject-ing it with some substances to improve the level of lubrication to cope with the international and environmental criteria in this do-main.He further indicated that the Op-erational Planning Division (Tech-nical Services Dept.) was able to achieve high profit through carry-ing out activities like the follow-ing:1. Operating an HCR-14 Unit to

produce diesel with low quan-tities of sulfur; around 9-10 thousand barrels daily.

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2. Operating a unit to remove sulfur from heavy oil (RCD) as it managed to produce it with higher levels; 36.7 thousand barrels compared to 35,000 daily in November and Decem-ber 2008.

3. Starting the production of coal with a low sulfur content to meet the needs of Oil Coal Co.

4. Improving the quality of fuel produced through reducing H2S emissions to lower levels, comparing positively to the in-ternational levels approved in this regard.

5. Exporting a cargo load of crude diesel through Al-Shaiba Refin-ery’s diesel pipes rather than via fuel pipes at Mina Abdullah re-finery.

6. Receiving quantities of crude kerosene from Ahmadi Port Refinery, which it refined and improved in a step aiming to produce high quality kerosene for use as plane fuel.

Commenting on the new Coke units, Al-Mutairi said that they are considered a unique project for units of processing or and op-

eration, pointing out that these units are the first of their type to be established in the Gulf area. He clarified that the design of the unit depended mainly on complete thermal breakdown for precipita-tion resulting from the Vacuum Rerun & Heavy Oil Cooling Unit to produce more profitable prod-ucts, such as Naphtha, which is a petroleum mixture, kerosene, die-sel, gas oil with the final precipita-tion of green Coke, which appears in a porous solid form after being cooled in special vessels. It is later removed using a cutter equipped with fountains with high fluid-ity. He added that the capacity of the Coke unit reaches around 600,000 tons annually.Underlining the importance of the recent projects, Al-Mutairi indi-cated that the projects which have been implemented are specifically related to the Technical Services Dept. which are represented by:

Firstly: The project of Efflu-ent Treatment Facilities Units is currently under construction for treating refinery effluent. This is expected to be completed in December 2009 as are the water handling units used in the various manufacturing units at KPC’s re-fineries (Mina Abdullah, Ahmadi and Al-Shaiba) through adding biological treatment units to the existing units in a step aiming to separate the polluted items in wa-ter such as oil, sulfur, ammonia, phenol and COD/BOD, in ad-dition to solid substances in the water before releasing it into the Gulf waters.Al-Mutairi said these procedures are compliant with Environment Public Authority’s (EPA) engi-neering criteria related to indus-trial water being extracted from Gulf water since, prior to their development, these units were re-moving oil from waste water be-fore returning it to the Gulf.Secondly: Facility for Moisture Control & Dehazing of Gas Oil at Mina Abdullah Refinery. This project aims to remove cloudiness from the final products of gas oil as these products must be marketed internationally since the specifica-tions of gas oil have become more strict and exacting in recent years on the international markets.As most of the final products of gas oil produced from manufac-turing units are not typical of the international specification, a moisture control unit has been designed and established at Mina Abdullah refinery, said Al-Mu-tairi, indicating that it is expected to become operational in the sec-ond quarter of the 2009/2010 fiscal year.Thirdly: The utilities storage and depository project at Petro-chemicals Industries Company’s

Coal Units project is entirely unique in the

refinery


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(PIC) Aromatics project. This project epitomizes the integration between Mina Al-Abdullah and PIC since the refinery provides the Aromatics project with naph-tha, which is a main ingredient in manufacturing high quality prod-ucts for export such as xylene. In addition, the byproducts of the Aromatic project are related to Mina Abdullah as they are export-ed through the Industrial section of Mina Abdullah, while the Aro-matics project also sends hydro-gen to KPC’s refineries and then to Mina Abdullah Refinery for use in the various manufacturing pro-cesses.Talking about the refinery’s future plans, Al-Mutairi revealed that it is seeking to complete a project (Clean Fuel Project 2020) which aims to manufacture products to the specifications laid down by the international oil markets, es-pecially those products related to its ability to provide environmen-tally friendly fuels. The engineer-

ing designs for the Clean Fuel Project 2020 are scheduled to be completed in December 2009 and work is expected to begin on it in 2010 in the hope of com-pleting it by 2015. Some of the processes used will be modified for use in the European market, such as the reduction in sulfur levels in some types of fuel.

The refinery seeks to implement several ambitious projects

cope with the international markets'

requirements

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Given the rapid and continu-ous changes on the interna-tional scene, major companies around the world are seeking to increase their stature by de-veloping their performance, focusing on how best to carry out their primary duties and to avert whatever factors might impede the progress of work in order to accomplish their goals more smoothly.To help it attain these require-ments, KPC established the

Oil Sector Services Company (OSSC) to meet the sector's increasing need for supportive services and at the same time to enable its subsidiaries to focus on their primary activities.Within a short period, OSSC accomplished several achieve-ments in many fields inside the oil sector. Heading these ac-complishments was its provi-sion of security services on the basis that maintaining safety is the most vital priority in

this field. Through its special-ist subsidiaries, KPC exerted tremendous efforts to provide properly qualified security of-ficers from among Kuwait’s young graduates, who received excellent training in the Pe-troleum Training Center to qualify them to take responsi-bility of oil sector security in cooperation with Ministry of Interior police officers, as well as providing logistical services to local oil companies.

It took practical steps to reduce pressure burdens oil companies

LEADERSHIP . . . is a target KPC seeks to achieve


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issues. OSSC was established in accordance with this vision to take charge of providing logis-tical services, epitomized by the provision of security, firefight-ing, housing, transportation and health services, as well as offering various other services that free oil companies up to fo-cus on performing their duties efficiently.KPC has given the security is-sue primary priority, placing it before any other service, and worked seriously on establishing an integrated security system for the oil sector. In addition, prior-ity was given to refineries, espe-cially after seeking the assistance of international consultants spe-cializing in the security field, who offered their ideas about improving the refineries’ secu-rity position, and that of the oil sector in general. After studying

KPC prioritizes security and prepares

competent personnel

these visions, a primary security committee was formed com-prising the oil sector personnel involved. The committee imple-mented a number of procedures to protect the refineries and the oil sector in general, in coopera-tion with the security commit-tee affiliated to the cabinet.These procedures have several aspects. On the issue of land border security, cement-sup-ported security barriers were constructed according to in-ternational criteria, while the refineries were surrounded by doubled barriers, with a total of 20 kilometers of fencing being erected, as well as electric fences and surveillance cameras being installed and special roads being built for security patrols. The same system was also introduced to protect the properties beside the Gulf, with a total of 10 ki-lometers of fencing and security barriers being constructed.The Gulf-side oil installations were also provided with a naval protection force, with 200 indi-viduals already receiving expert training from an international

It is widely known that KPC is steadily advancing towards tak-ing a pioneering role in this field, with its internationally ad-mired vision enabling Kuwait’s oil companies to focus on their key activities and to avoid hav-ing to spend time on irrelevant

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A number of highly-equipped sub-fire

centers are affiliated to a principal one

specialist firm, although only 160 of these have passed the training courses to date. This step was followed by the intro-duction of what became known as the ‘beach force,’ security of-ficers who work round the clock to protect marine petroleum fa-cilities, using fifteen boats dis-tributed across three areas of the Gulf in coordination with the Coast Guard. KPC is currently working on a project that aims to provide full naval protection by utilizing sonar system, ma-rine obstacles and other systems

to prevent any boat from ap-proaching the oil facilities.

KPC has also established a spe-cialist force called the Industrial Security Force, which was set up in cooperation with the security committee affiliated to the cabi-

net, with 117 individuals grad-uating to form the core of this unit. The officers received train-ing on specialist courses to learn how to deal with and inspect ve-hicles arriving at the oil sector, including Al-Shaiba Industrial Zone. These officers have been provided with specialist sniffer dogs to guard the gates, with these dogs specially trained to sniff out explosives and drugs. Through its affiliates, KPC chose the best training facilities to train the dogs, as well as al-locating a 10,000 sq/m area to house them in.Meanwhile, another vital se-curity project was launched to develop, expand and improve the security system at Al Shaiba Industrial Zone’s main gates, to enable security officials to monitor the hi-tech surveillance system there. The security offi-cers will also work closely with Interior Ministry experts, who will supervise and coordinate Industrial Security Force’s work through establishing advanced security checkpoints provided by Interior Ministry to allow officers to check all vehicles and individuals in compliance with an agreement signed by the two sides.Noting that the development of its refineries and factories is a continuous process, KPC ob-


20

A brilliant future under KPC obvious strategy

served that its internal firefight-ing system had not developed sufficiently to cope with the expansion of its industrial op-erations; after conducting an intensive study of this issue in cooperation with international specialist consultants, therefore, KPC decided to construct three support centers, one of which is a main center, while the other two are smaller subsidiaries. The main support center will be located next to the refiner-ies and equipped with advanced systems and apparatus suitable to their and Al-Shaiba factories’ requirements, including equip-ment enabling them to deal with petrochemical accidents and rescue missions, as well as other specialist gear to deal with refinery accidents.OSSC is also keen to provide an on-site training center to serve the oil sector.

OSSC has already begun to of-fer company cars to some KPC subsidiaries’ staff, and is seeking to introduce a number of logis-tical services systems to achieve the required level of excellence in the oil sector.In terms of the health services provided to staff, KPC pays a great deal of attention to this issue, continuously striving to provide the best health services to all oil sector personnel, de-spite the pressure resulting from the steep increase in the num-ber of patients visiting Ahmadi Hospital.KPC remains upbeat about the future and continues to act in accordance with its strategy to ensure first and foremost that all irrelevant pressures are re-moved from oil companies to enable each of them to fulfill its responsibilities as well as pos-sible.

KPC has won full government support, demonstrated by the granting of a 150,000 square-meter area for the support center’s construction. Proce-dures are ongoing to prepare the tender for the building of the main center, while the subsidiary centers will be lo-cated in Al-Mokawa’ and Al-Ratka.On a separate issue, OSSC also aims to provide some other services which may help to im-prove oil sector productivity, including offering advice on nutrition for workers, clean-ing services, the provision of company vehicles, furniture and agriculture.

21


Female oil sector staff are dis-tinguished by an excellent status that cannot be found in many other fields in Kuwait, and have already cemented this status and managed to turn it into a practi-cal reality through their exertions and efforts, which have qualified them to occupy leading positions in this vital sector, especially af-ter proving that they deserve ev-ery position they occupy.A committee of female Kuwait Oil Company (KOC) staff was recently formed, just after a large number of newly qualified fe-male engineers started with the company after graduating from Kuwait University’s Engineer-ing and Oil Faculty. Some of

these women were recruited by the company’s Drilling Group, which is considered one of the hardest working in the oil indus-try.To find out more about women's role in the oil sector, the privi-leges they have gained, the es-sential qualities and skills for their success, the achievements they have managed to attain and what they will be able to achieve in the future, KPC World met with Hosniya Hashim, KOC’s DMD for North Kuwait and the chairperson of the Committee of Women Working with KOC.She began by stating that in re-cent years Kuwaiti women have attained many of the rights due

to them, pointing out that Ku-wait was among the first coun-tries in the Middle East to offer women opportunities to occupy senior positions at work equal to male staff. This had led to wom-en exerting great efforts to prove their excellence and their ability to live up to the responsibilities that the country put on their shoulders.Kuwaiti women have managed to be ambassadors, rectors and min-isters, as well as being successful in the field of private investment, she said, adding that they have continued to exert great efforts in order to reach the National Assembly to ensure that women are represented in the country’s

On her way to further progress and active participation

Hosniya Hashim: Success in oil world requires a diligent woman


22

parliaments, as well as female MPs’ constituents of both sexes.In the oil sector, meanwhile, Ku-waiti women have managed to compete with their male coun-terparts in occupying several im-portant positions, with female staff reaching positions of lead-ership, such as senior engineers, department heads, managers and Deputy Managing Directors. Some have managed, through their hard work and abilities, to attain the position of Managing Director (MD), with Ms. Maha Mulla, the chairperson of Petro-chemicals Industries Company’s

female staff are the same as they are based essentially on good education, sincerity, hard work, perseverance and constructive communication with others, in addition to courage in taking de-cisions and shouldering the full responsibility for the results of those decisions, good or bad.“In fact, our conditions were harder in the beginning com-paring to our current position,” Hosniya said, “therefore we had to overcome several obstacles, possibly a larger number of them than were faced by male staff, and our weapon in accomplish-ing this was perseverance and determination.” She explained that the senior female oil sec-tor workers had largely trained themselves until reaching their current positions.She went on to state that the cur-rent conditions for female staff are totally different from those previously faced by her and other women in Kuwait’s history, say-ing that the contemporary path for women’s advancement is well paved, with education available for all and support from female colleagues and the oil sector’s administration to help them achieve progress and success.

The basic elements of success for women are

the same required ones for men

board of directors and MD of the company, and Shaza Al-Sabah, MD of KPC’s Training and Development Sector.Commenting on the primary el-ements in female staff members’ success, Hashim said that the es-sentials of success for male and

23


There is a widespread idea that men monop-

olize oil sector work

Talking about the achievements she has attained during her career to date in the oil sector, Hashim said she is proud of developing and increasing the production levels in several of KOC’s fields, including those in the south, east and west of Kuwait. She explained that she had to re-arrange the teamwork to achieve this accomplishment, indicating that she simultane-ously sought out the most intelli-gent and hard-working staff to be able to achieve this goal through teamwork, with development be-ing her primary objective.This policy led to the creation of teams of female staff, who use their members’ experience and direct contact with international bodies in their work with KOC, with all of the team members be-coming prominent leadership fig-ures in KOC.Talking about the committee of female KOC staff, Hashim re-vealed that the idea of forming the committee came about dur-ing the regular meetings held with the pioneering international oil companies, such as Exxon Mobil and Total, which take a great deal of interest in their fe-

male staff members’ careers. In addition, these companies had established committees and soci-eties for their female staff to help them develop their abilities and experience.Hashim said that the Kuwaiti oil sector needs such committees to reinforce the relations between the women working in this sector and their colleagues in other oil companies, in addition to facili-tating the process of exchanging knowledge and experience. She explained that this was what led to the establishment of the commit-tee, which was greatly supported by the company’s senior admin-istration, especially the chairman of KOC’s board of directors, MD Sami Al-Rashid.Ms. Hosniya summarized the main objectives of the initiative to establish the committee in the following points:

• To provide effective oppor-tunities for female KOC staff to communicate with one an-other and strengthen diversity within the company’s techni-cal leadership.

• To highlight the successful models of women who man-aged to achieve high technical positions at the local, regional and international levels.

• To establish an educational program for female staff who have recently joined the com-pany.

• To create effective means in-side the company to develop and cement relations among female personnel.

• To increase the expertise of young female engineers through interaction with ex-amples of leading female staff in the company to improve their technical abilities.

• To present a model of success-ful female workers in Kuwait at the regional and international levels.

Asked about the committee’s plans for the future, Hashim explained that a plan was put in


24

Women shoulder a major role in progress

and development

place at the beginning of 2009, which was the first step to estab-lish the committee and increase awareness among women work-ing in Kuwait, in addition to sur-mounting the prevalent cultural conditions which are resistant to change. The plan includes monthly meetings, exchanging news, preparing documentary films, establishing a website and issuing video movies, as well as launching an award for the ideal KOC female staff member.“Among the committee’s objec-tives is to take practical steps to establish similar links with fe-male staff working with the oth-er Kuwaiti oil companies, as well as reinforcing relations at the international level through ex-changing experiences with wom-en working with international oil companies,” said Hashim. The plan also aims to see the com-mittee hosting businesswomen who have achieved successful careers at the international level and who occupy senior positions in the oil sector and other sec-tors. These include the Dean of Texas University, the Deputy Chairperson of the French Total oil company, the manager of the National Bank of Kuwait (NBK) and the DMD of the Bahraini Babco oil company.Hashim did not deny that there are still obstacles facing women’s progress in the oil sector, which she said were mainly in the form of the widespread erroneous idea that oil sector work is physically strenuous and can only be per-formed by men. This false im-pression had led to many Kuwaiti women hesitating about pursu-ing careers in the country’s oil sector, she said.However, she asserted, success in the oil business, as in any field of work, requires great exertion of effort, patience and persever-ance, especially given the wide-spread lack of acceptance of female staff working in the oil sector. This should make women

accept these conditions willingly and exert the necessary efforts to ensure that others recognize the importance of their role, not only to the oil sector, but to so-ciety in general.Hashim said that there is no doubt that women’s supportive role is a vital one in national de-velopment and construction, as women, like men, have the same capabilities enabling them to be-come successful.At the end of the interview, Hashim indicated that the num-ber of women working in Ku-wait’s oil sector has notably dou-bled in recent times, with female staff excelling in several areas. This means that they have faced numerous challenges, just as the sector itself faces many chal-lenges, and requiring support to overcome them, she concluded.“We need support to continue on to have more progress and, bit by bit, society's viewpoint on women’s abilities will change and then opportunities will be available for everyone without discrimination.”

2�


Believing that man is the prod-uct of his environment, KNPC prioritizes to protect the envi-ronment, control pollution and, with the resulting clean, provide healthy environment, helping to create a society capable of devel-opment. In recognition of this objective, KNPC has launched a project introducing two fuel vapor recovery units at its petro-leum derivative depots in Sabhan and Ahmadi. The project aims to create an environment free of hydrocarbon vapors. The idea for the project originated in the late 1980s and came into effect to integrate the environmentally friendly system which KNPC is working on creating for the future.This project which is supervised by the Local Marketing Depart-ment’s Projects and Establish-ments division recently won

KNPC establishes, operates two hydrocarbon vapor recovery units in

Sabhan, Ahmadi stores

Committed to the principles of health, safety and environment

Raed Al-Arefan: The project focuses mainly on reducing

air pollution, providing clean, safe environment

light the project’s main objec-tives, phases and environmental benefits.In the beginning, Eng. Raed Al-Arefan, the Team Leader of the Local Marketing Department’s Projects and Establishments division, said that the project became operational following several years of cooperation with the Kuwait Institute of Scientific Research (KISR) since the tech-nology to recover fuel vapor was initially unproven; this factor did not lead the department to give up its goal to develop the fuel sta-tions and Sabhan and Ahmadi depots or to rehabilitate them for the various fuel vapor recovery projects, however.The project’s primary aim is to reduce air pollution and provide a clean and safe environment for fuel station users, staff and per-sonnel at the company’s depots,

Committed to the principles of health, safety and environment

the gold prize for 2008/2009 awarded by the chairman and DMD of the Health, Safety and Environment sector. To mark the occasion, KPC World interviewed the project's personnel to high-


2�

Al-Arefan explained, indicating that the company is extremely enthusiastic about its objective of providing an environment free of hydrocarbon vapors, reflecting its commitment to meet its HSE obligations towards its personnel and wider society, especially after it managed to obtain the ISO international certificate 14001.He revealed that the two units that recover the vapor from the fuels which the tankers bring to the depots from fuel stations are equipped with advanced vapor recovery technology for recov-ering fuel vapors which have escaped into the atmosphere, as well as those emitted while filling the tankers in the depots’ loading areas.

Healthy environmentMeanwhile, Bader Al-Otaibi, the Team Leader of the Marketing Department’s warehousing divi-sion, confirmed that the project had succeeded tremendously in reducing emissions of volatile chemical compounds from fuel stations and in the areas used to fuel and offload tankers at the company’s depots. This has led directly to a noticeable improve-ment in improving the general atmosphere and creating a safer environment, with the project also reducing the risk of fires, which large amounts of fuel vapors in the atmosphere can contribute to.

The project's successCommenting on the time taken to establish and implement the two fuel vapor recovery units at Sabhan and Ahmadi depots, engi-neer Hussein Al-Ghadhori, the principal engineer with the Local Marketing Department’s Projects and Planning division, said that the project and the associated activities had been accomplished

on time within the set schedule without incurring any additional costs through close cooperation between all those involved, as well as successful coordination with the various Local Marketing Department sections.Al-Ghadhori revealed that two fuel vapor recovery units went into operation in March 2008, passing all the necessary efficiency tests in July that year, and further

confirmed that the two units were now working perfectly at an effi-ciency rate of over 95 percent.

Fuel vapor recoveryMeanwhile, project engineer Meshari Abdullah Al-Najdi, meanwhile, explained that all the fuel stations were updated and provided with the new ‘Vapor Recovery - Stage 1B’ system prior to the two vapor recovery units installed in the company’s depots becoming operational. These units recover the fuel emitted when the tankers are being emp-tied into the underground fuel tanks there, as well as extract-ing the hydrocarbon vapors from these tanks to transport them to the store for recovery via the vapor recovery unit. Al-Najdi explained that in the second phase of the project, the department is to introduce the vapor recovery system in ordinary petrol stations used to re-fuel cars.Emphasizing the importance of the fuel vapor recovery unit in the company’s two depots, the proj-ect engineer briefly explained the different stages of designing the unit and its operational system.

Bader Al-Otaibi: The project has provided a safer environment for fuel station users and staff at KNPC’s

two depots

2�


The initial stage of the project was carried out by Local Mar-keting Department engineers, he explained, adding that the unit’s design relies on two reac-tors containing a ‘Pressure Swing Absorption’ system, which pres-surizes active carbon.This technology aims to recover fuel vapors from fuel transported from fuelling stations equipped with vapor recovery systems, as well as other vapors resulting from the process of filling the tanks in the depot to limit the emission of volatile organic compounds.Explaining the operational system used to operate the two reactors, Al-Najdi said that the fuel vapor

recovery units’ carbon reactors alternate with one another every fifteen minutes to receive a mix-ture of hydrocarbon vapors and air in the tanker-loading area, with the active carbon in each reactor absorbing around 99 per-cent of the fuel vapors, while the air is purified through a ventila-tion system; the percentage of fuel vapor attained after six hours of operation must be a maximum of 19 milligrams per liter and, after the active carbon reaches satura-tion level, two vacuum pumps using a dry screw system begin to empty the collected vapors from the reactors and send them to an absorption tower. The engineer explained that this process is fol-lowed by the reactor being puri-fied through forcing air through it in the last quarter of the regen-erative process for a period of fif-teen minutes to help the carbon recover its original capacity to absorb incoming fuel vapors.Al-Najdi said that the unit recov-ers the extracted vapors from the reactor in question during a regeneration cycle through the condensation process which takes place at the vacuum pump exit, where the petrol used to cool the pumps with the vapors before they are sent to the absorption towers; after this, the major part of the fuel vapor recovery pro-

cess takes place inside this tower through the flow of fuel vapor and petrol, which are pumped from one of the depot’s store-houses by the collection pump in a counter-current flow. After this, the petrol added to the recovered fuel vapors is introduced to the same tank by a recovery pump. To obtain the greatest degree of absorption during the summer period, the vapor recovery unit was provided with thermal inter-changes to cool the petrol used in the absorption tower and the two evacuation pumps.The hydrocarbon vapor recovery unit works automatically via a ‘PLC’ control unit connected to a computer in an adjacent control room so that the depot operator can communicate with the unit and monitor its activities. The computer is also used to establish regulations for the unit to rectify any technical problems encoun-tered there.

The units’ efficiencyEngineer Hossam Al-Jeran, the Environmental Specialist at Mina Abdullah Refinery, said, “The vapor recovery unit project at

Hassan Al-Ghadhori: The project accom-

plished on time without delays or extra costs

Meshari Al-Najdi: The project’s basic

engineering complet-ed by Local Marketing

Dept.’s engineers


2�

Sabhan and Ahmadi Depot has played a visible part in reducing the hydrocarbon emissions at the fuel station which accompanied the fuel tanker-filling operations there.” He added that this has eliminated the negative impact that these emissions previously had on the atmosphere for com-pany personnel and all those vis-iting and using the two depots.Al-Jeran explained that KNPC’s HSE Department’s Environment Division, which has attained ISO 14001:2004 certification, utilizes the latest international technology to monitor all hydrocarbon emis-sions that result from the com-pany’s daily operations. More-over, he revealed, KNPC recently bought four ‘Gas Finder IR’ cam-eras for the Industrial Odor Man-agement project. These cameras

have been used to assess the two units’ and the fuel stations’ vapor recovery systems’ performance. After evaluation of the results, it

was clear that there are currently no hydrocarbon emissions from the operations to provide tankers with petroleum derivatives.

CondensateKnock Out Tank

CarbonAdsorber

Open Closed

SupplyPump

GasolineStorage Tank

VaporCheckValve

PurgeAir

DRY VacuumPump

Absorber Tower Recycle Line

Absorber

OPEN

CLOSED

Carbon AdsorberRegenerating

ReturnPump

Carbon AdsorberRegeneratedClosedOpen

CLOSED

OPEN

Loading Gantry

Closed

A diagram of the Vapor Recovery Unit

2�


KNPC, KPC’s right arm in the refinement field, is seeking to upgrade its services through uti-lizing its abilities to develop itself and flexibly tackle the challenges it faces. In accordance with this objective, KNPC wishes to carry out several major investment projects cor-responding with KPC’s strategic goals; among the most important of these is its decision to introduce cutting edge programs and sys-tems in its operations, which it first began implementing at the begin-ning of the 2007/2008 fiscal year. On the subject of these new sys-tems, KPC World interviewed Khaled Al-Mushaileh, KNPC’s Corporate Planning Manager, who explained that the company intro-duced a new strategy for approv-ing its studies and projects at the

Updating program to cope with international changes: Khaled Al-Mushaileh

beginning of the 2007/2008 finan-cial year. He revealed that the new strategy relies on the Gates System, which assesses each step of the project from its beginning as a con-cept, then evaluates the feasibility study and the subsequent phases, which comprise the basic engineer-ing studies, designs and implemen-tation. Finally, these projects are evaluated in terms of their success in achieving the technical and eco-nomic objectives which they set out to attain.

KNPC introduces modern operations management system


30

Al-Mushaileh said that the proj-ects are appraised through spe-cialist technical committees, such as the senior project evaluation committee, known as the ‘Gover-nance Body,’ as well as the ‘Project Review Committee.’The senior executive explained that KNPC does not rely solely on the Gates System, but has also intro-duced a strategy entitled ‘Perfect-ing Improvements to the Supply Chain,’ which is being used at pres-ent. In addition, the company aims to develop the methods and proce-dures of work to ensure that clients have the highest priority through providing them with the specialized products best suited to their needs in a timely manner, as well as pri-oritizing profitability and utilizing the company’s refineries to obtain the greatest possible benefit. Al-Mushaileh said that the new project is designed to develop working practices and introduce administrative changes in the area of integrated solutions, which will be used in all the company’s refin-eries, as well as in the Corporate Planning Department.It also aims to create a system of ideal improvements to the manufac-turing process, in addition to intro-ducing the integrated solutions in its three refineries to support short-term, mid-term and long-term plan-ning and rescheduling the dates for periodical maintenance work at them. Other objectives are to cal-culate production levels, implement operational processes and manage performance.In cooperation with KPC and its other subsidiary companies, KNPC has also introduced a new system to monitor and evaluate the performance of its ‘Capital Proj-ect Tracking’ system to ensure the accomplishment of its technical and economic goals that these projects were introduced to meet. The com-pany is also seeking to benefit from the accumulated experience of the other affiliates, particularly from their management and monitor-

ing of 'Capital Project Tracking', as well as their strategies for dealing with contractors who implemented these projects to enable all to ben-efit from them.KNPC is also seeking to implement a number of projects for increasing refinement capacity to around 1.5 million barrels per day (bpd), while also carrying out a number of vital refinement sector-related projects, such as liquefied gas importation, establishing a fourth unit to pro-duce liquefied gas, updating its water handling utilities, improving and perfecting the supply chain, replacing and updating the old control systems at ageing refinery facilities, as well as replacing and updating those in the new ‘RMP’ refinery zone and renewing and updating the gas flaring system at Ahmadi Port Refinery to a system of burning without the release of fumes. These are just a few of the vital projects being carried out by the company to serve the oil sec-tor.Talking about the projects which the company is working on, Al-Mushaileh said that KPC’s strate-gic plan is based on its subsidiaries’ strategic goals, therefore it seeks to expand its refinement capacity to 1.5 million bpd, in addition to achieving the highest level of con-version offered by Kuwaiti refin-eries. He also highlighted local energy requirements, saying that this increase the value of the coun-try’s petroleum resources.Al-Mushaileh said that, in coop-eration with KPC, KNPC seeks to introduce strategies and projects to fulfill its objectives. He said that this is represented by the envi-

ronmentally-friendly fuel project, which will enhance the refineries’ conversion abilities at a rate of up to 95 percent, through producing high-quality petroleum products which meet international specifica-tions in this area.The projects being studied and implemented by KNPC are designed in accordance with the company’s HSE requirements, as well as complying with the inter-national market’s needs in terms of quality and strict specifications in this regard.This issue, in fact, is a vital compo-nent of the company’s vision, which seeks to achieve high-perform-ing leadership and make the best choices, as well as ensuring absolute credibility for its clients. KNPC’s operations are distinguished by their high levels of idealism and integration, which are integral val-ues for the company, which exerts tremendous efforts to meet its responsibilities for the health and safety of contractors and the gen-eral public. It also takes complete responsibility for all the products and services it provides, ensuring that they are of the highest quality and environmentally friendly.

ChallengesTalking about the challenges facing KNPC’s Planning and Implemen-tation sector, Al-Mushaileh said that these are represented by the continuous fluctuations in crude oil and petroleum product prices, as well as the major changes in the international markets and the influ-ence of these on the prices of iron ore, raw materials and employees’ wages. Other considerations are the issues related to the contracting and project development sectors and the development of interna-tional special projects in the pet-rochemicals and refinery sectors, as well as their relation to providing the best executive contractors to supervise the projects’ implementa-tion due to the integral nature of all these factors in achieving KNPC and KPC’s strategic goals.

Continuous visible oil price fluctuations are

among the most prominent challenges

we face

31


Performance improvement and low rates of emissions

resulted from burning gas are importantly prioritized

Ismail Abdullah: We

seek to produce 500,000 bpd

from West Kuwait


32

Ismail Abdullah, the manager of KOC’s West Kuwait Service Group, said that all the group’s staff seek to ensure safety and security in all its operations and activities in order to avoid any environmentally unfriendly side effects. For this reason, the group has launched several projects to limit gas emissions and end the problem of water being polluted by oil, in addition to implement-ing strict procedures to avert the occurrence of any accidents, he explained.Abdullah said that the group is enthusiastic about continuing to hold regular training courses on evacuation drills, control-ling accidents through being prepared to deal with any emer-gency and conducting awareness campaigns to promote safety-conscious daily behavior by its staff and contractors. He added that these campaigns have led to a tangible reduction in the inci-dence of accidents, despite the large number and wide range of projects and activities the group is involved in.Abdullah stressed the necessity of providing continuous plans to achieve the company’s desired objectives, with the 2020 Strat-egy being among these. He emphasized the group’s eager-ness to implement these plans and the strategy, as well as fol-lowing them up through issu-ing daily, monthly and annual reports to improve performance. The group also organizes regu-lar staff awareness campaigns to shed light on the objectives of the 2020 Strategy and how to accomplish them.Speaking with KPC World about the group’s activities, which aim to support the company’s other groups, as well as its readiness to implement the 2020 Strategy,

Abdullah explained that the Ser-vices Group plays a crucial role in supporting the directorate's other groups, represented by the Planning, Projects Management and Manpower departments. He added that the Services Group is a link between the West Kuwait Directorate and the company’s other groups.Abdullah explained there are three teams affiliated to the group as follows:Planning Teamwork; This section plays a central role in the West Kuwait Directorate as it connects the directorate's groups with one another and is a link between the West Kuwait Directorate itself and the other directorates, with the team specifying the neces-sary planning requirements in line with indicators and future expectations. It also follows up and monitors the directorate’s activities and played an effec-tive role in preparing the West Kuwait Directorate’s strategic ‘Asset Action Plan’ in coordina-tion with the directorate's other groups and teams. Furthermore, it prepares the directorate’s and groups’ annual operative ‘Bal-ance Score Card’ plans, as well as following them up after they are approved. As well as this, it coordinates and prepares the meetings of West Kuwait Devel-opment Committee’s meetings, which aim to prepare monthly reports on the directorate’s activities and achievements, after

which it submits the commit-tee’s recommendations to the directorate's administration to develop its performance. It also presents recommendations to the quarterly management meet-ings to evaluate and assess each group’s performance.Moreover, the team collects, clas-sifies and analyzes data before checking it against the previously set objectives before presenting reports and recommendations on its findings. It also supervises the annual inventory stocktaking of assets affiliated to the director-ate. The group is also responsible for supervising the preparation of the annual approximate bud-get (operative expenditures) of the Services Group for the other groups, as well as for checking all the projects (BP) forwarded by the West Kuwait groups. Among its other duties are analyzing pro-posals (CPP) and evaluating their economic feasibility, in addition to checking and following them up, which is done by the internal

We give engineers, technicians second-ment opportunities

with int’l companies to gain experiences

33


committee established to assess these proposals, the CPP Screen-ing Committee. It also follows up the main capitalistic projects to ensure that they are achieved on time. It aims to highlight possible obstructions that could impede the implementation of projects and to provide solutions to overcome them. The Planning Teamwork section also holds regular coordination meetings with groups outside the direc-torate with the objective of uni-fying the efforts to fulfill the directorate’s goals and ensuring that the directorate’s message is clearly transmitted. It coordi-nates regular meetings between all employees and administra-tive staff to eliminate any minor impediments in order to improve the working environment and adopt a policy of openness, as well as preparing and submit-ting periodic reports about the activities and performance of the directorate such as:- The report on monthly per-

formance (MPO)- The Projects Performance

Report (PPR)- The report on excavations and

well maintenance- The quarterly report on the

directorate's performance- The midyear production plan- Follow-ups and updates on the

five-year production plan

The Projects Management team is the body concerned with run-ning the directorate’s projects and following up their imple-mentation through coordinat-ing among the teams involved, including the engineering group which is tasked with allocating the required resources in line with the budget schedules. There is also permanent and continuous coordination among the directorate’s operations and technical services teams on the projects, with committees and teams being formed, including representatives of the concerned departments, to follow up some projects, for example the Assem-bly Center 16 project in west Kuwait, which is considered a challenge for the project depart-ment team (West Kuwait); the project was previously supposed to be implemented by the Large-Scale Projects Group II.The Manpower Team is respon-sible for providing the personnel at the West Kuwait Director-ate with assistance, especially in

matters concerning each team’s manpower requirements to facil-itate the implementation of their duties. It also implements the necessary policies and admin-istrative procedures, helping the teams to prepare and carry out internal and external train-ing courses for the directorate’s administrative and technical per-sonnel. The Manpower Team is also concerned with providing technical training courses, which are prepared and delivered by specialist Manpower Team train-ers for staff at the directorate’s assembly centers, as well as for monitoring other services, such as catering and cleaning, whether in the administrative offices or the Assembly Centers.Among the most important objectives of the West Kuwait Directorate’s strategy is to pro-duce 500,000 barrels of oil per day from the fields there, in addi-tion to maintaining that level by 2020. It also aims to reduce the percentage of gas flaring to 1% by 2012.To be able to achieve the 2020 Strategy's objectives, the West Kuwait Services Dept. has estab-lished a number of plans, which it monitors on a daily, monthly, quarterly and annual basis, in order to improve performance. It has also established a plan to provide vacancies and conducts regular awareness campaigns to inform staff of the 2020 Strate-gy’s objectives and how to fulfill them.Abdullah emphasized that the group is also keen to perform all its operations and activities in a safe manner to maintain a healthy environment, saying that for this reason it has implemented several projects to reduce gas emissions and end the problems of ground-

We have organized staff awareness

campaigns on the 2020 Strategy and how

to achieve it


34

water being polluted with oil. He added that strict procedures have been introduced to prevent acci-dents.The group is also eager to hold emergency drills for evacuation and accident control procedures in order to maintain staff mem-bers’ readiness to deal with any emergency. In addition, the group runs awareness campaigns to promote safe daily behavior by personnel and contractors, Abdullah explained, adding that these campaigns have helped to visibly reduce the incidence of accidents, despite the large number of projects and activities being worked on.The group has worked closely with the directorate’s other groups to put an inclusive safety plan in place, which covers all the required projects such as drilling and extending pipes to assembly centers and injection wells. In addition, it coordinates with the concerned teams on maintaining the reservoirs and ensuring supplies of spare parts, as well as preparing the projects' budgets and scheduling them in accordance with the various pro-grams. Among the most impor-

tant projects covered by the plan are the following:- A station to reinforce gas no.

171 (BS-171).- Assembly center No. 16 with

oil pipes and gas.- Drilling production and injec-

tion wells.- The principal power stations.- The gas re-injection project.- The experimental water injec-

tion project in Zareef field.- The project to update the

water-handling system in the Oum Qadeer zone.

Commenting on the process of instructing and training the group’s personnel, Abdullah said that this is carried out through several methods, including hold-ing internal and external train-ing courses, on-site training programs and other types of

training organized by the Train-ing and Vocational Development Department and the Manpower Team. The group also provides chances for engineering and technical personnel to receive on-the-job training with several international companies at their headquarters abroad to gain and exchange experience.Talking about the problems the group faces in West Kuwait, Abdullah said that the shortage of specialist personnel is a major obstacle as the group needs tech-nically trained personnel to work in its production operations, in addition to working on main-taining the reservoirs and devel-oping them in accordance with West Kuwait strategy plan.He added that the implementa-tion of some projects has been delayed by the performance of some contractors and the rise in building material and equip-ment costs on the international market, saying that these are some of the problems that the group faces. He stressed that the group coordinates closely with the company’s other groups to resolve all problems in a prompt manner.

Strict procedures are applied to avoid the occurrence of any accident to keep

environment

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The challenges of developing, producing and marketing Heavy Oil of North Kuwait fields

The challenges of developing, producing and marketing Heavy Oil of North Kuwait fields

By Badriya Hussein FerhadManager of Heavy Oil Development Group (North Kuwait), KOC


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The precipitous drop in oil prices since the summer of 2008, com-ing on the heels of a dizzying seven-year rise, was a reminder that the oil business is cyclical. When demand drops and prices fall, companies curb their in-vestments, leading to lower sup-plies. When demand recovers, prices rise again and companies start to invest in new produc-tion, starting another cycle.One reason that projects are being shut down so fast is that costs throughout the indus-try, which had surged in recent years, are still high, despite the drop in oil prices. Many compa-nies are waiting for those costs to come down before deciding whether to go ahead with new projects.To meet the predicted global de-mand, according to the United States Department of Energy’s research arm, Saudi Arabia will need to produce 13.6 million barrels per day (bpd) by 2010 and 19.5 million bpd by 2020.Saudi Arabia has been the world’s leading oil exporter for many years. Today, the country produces around 8 million bar-rels a day—roughly one-tenth of the world’s needs. If Saudi production fell short, the conse-quences would be significant.

resources, such as Heavy Oil, with 70% of the remaining oil re-serves in the world being in the form of Heavy/Extra Heavy Oil and Bitumen.Along with its subsidiaries, KPC is taking the lead in developing, producing and optimally market-ing the heavy oil, with its 2030 strategy calling for 4.0 million bpd by 2020 through to 2030, of which 11% will come from the north Kuwait Heavy Oil fields.As it is clear from Figure 2, Heavy Oil fields are located geographi-cally in all the world’s continents, with the giant fields situated in Russia, Canada and Venezuela.The Heavy Oil accumulations oc-cur at shallow depths in different Kuwait oil fields, like the Ratqa, Raudhatin, Sabriyah, Bahra, and Mutriba fields in north Kuwait, the Managish, and Umm Qudair fields in west Kuwait, the Greater Burgan field in southeast Kuwait and the Wafra field in the Divid-ed zone.The crude oil reserves concept distinguishes various types of oil reserves: Proven, Probable and Possible.The worldwide conventional re-serves are 1.3 trillion BBL, com-pared with 6 trillion from heavy hydrocarbon and bitumen. The distribution is given below:

While the world has other large conventional crude oil producers like Russia and Iraq, these coun-tries do not have excess con-ventional oil capacity for export like that found in Saudi Arabia. Therefore, they will not be able to make up for short supply and the new oil fields found else-where around the globe are tiny when compared to Ghawar in Saudi Arabia, Burgan in Kuwait or Cantarell in Mexico, and will thus be unable to deliver enough oil to make up the difference. As a result, supplies will tighten and oil prices will increase further.The value and power of oil should never be underestimated. There is simply no more cost-ef-ficient source of energy produc-tion. But while that resource of easy to attain oil is falling, the world will have to look at what options we have from this point. Technology can play some role in offsetting the decline, but the available solution to Peak Oil comes from non-conventional

Heavy oil fields are wide and their

reservoirs located in shallow depths

The geographical distribution of heavy oil fields Figure no. 1

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into a perforated well, and the continued production of sub-stantial quantities of sand along with the oil.It is a primary production meth-od because it exploits natural en-ergy resources in the reservoir: energy from dissolution and ex-pansion of gas (compressional energy), and energy from the downward motion of the over-burden (gravitational energy).The Heavy Oil at Lower Fars is highly challenging technically and economically. Therefore, optimization of the project re-quires integration throughout the value chain (Upstream, Mid-stream and Downstream). Ku-wait can capture the full value of its Heavy Oil resources through production of the Lower Fars Heavy Oil by selling it on the in-ternational market or processing it in Kuwait’s refineries.Heavy Oil from the Lower Fars field in north Kuwait has an 11-18 API range and a high sulfur content of around 5% wt., which is challenging as few refineries worldwide are capable of pro-cessing this type of crude. In ad-dition to this, the production rate of Heavy Oil has a significant im-pact on the operating costs and

Heavy Oil is empirically defined as semi-solid petroleum of less than 20 API gravity, or more than 100 CP viscosity at reser-voir conditions.Geochemical analyses indicate that heavy hydrocarbons are com-posed primarily of asphaltenes, resins, and metals (most com-monly vanadium and nickel).North Kuwait’s Heavy Oil at Lower Fars is distributed over a large area in the Ratqa field (1200 KM2) and the other fields are Raudhatain, Sabriyah, Bahra and Mutriba. The density of oil varies from 10 to 18 API and the viscosity from 200-1200 CP at 100 degree F. The net pay varies between 10-70 ft from north to south of Ratqa field.Several types of technology are successfully used in Heavy Oil extraction, including CSS, steam flooding and SAGD, while other

technological methods are being experimented with, such as VA-PEX. THA, etc.It is possible to use costly but commercial technological meth-ods, such as continuous steam injection (steam flooding), in-situ combustion, SAGD, and other processes. With application of these processes, a 10-60 % Re-covery Factor can be achieved.Cold Heavy Oil Production with Sand. (CHOPS) is defined as a primary Heavy Oil production method that involves the de-liberate initiation of sand influx

Expertise and technology are

needed to establish the necessary installations

Shows the worldwide distribution of conventional crude oil & heavy hydrocarbons

API Gravity Viscosity (CP)

Light Oil >31.1 <100

Medium Oil 22.3-31.1 <100

Heavy Oil 10-22.3 100-10,000

Extra Heavy Oil <10 10 -10,000

Bitumen <10 >10,000


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ventional crude, therefore to be able to achieve the strategic production target, the following recommended solutions need to be considered:1. International oil companies

have extensive experience in Heavy Oil development and marketing, therefore a deci-sion needs to be taken by higher authorities to engage the IOC’s in the Heavy Oil project.

project economics. Therefore, it is vital to study different crude disposition options to come up with an optimum value from this type of crude.The expected crude disposition options are as follows:1. By diluting or blending the

Heavy Oil (<15 API) with a much lighter crude oil of 46 API to produce a blend of 16-31 API and 1-3% wt. sulfur, to be sold on the open mar-ket.

2. By processing the Heavy Oil in upgrading complexes and, depending on the selected up-grading scheme, producing a range of synthetic or upgrad-ed crude oils which vary in API from 16 to 35 and have a sulfur content of between 0.1 and 3% wt.

3. Refining the crude in Kuwait or in international refineries. The new national refinery and the Asian market such as Chi-na, Japan, North Korea, etc as well as the US West Gulf coast, could be a potential outlet for Lower Fars prod-ucts.

4. Use the Heavy Oil crude as fuel for power generation and/or for the Heavy Oil project,

as a non-conventional crude has to be treated differently to con-

Non-Thermal

• RF = 5% - 20%

Thermal

• RF = 10% - 60%

Primary

• RF = 5% - 10%

• Combustion

- FireFlooding

- THAI

• Steam

- Css/HCS

- Flooding

- SAGD

• ColdProduction

• CHOPS

• NCW

• WaterFlooding

• CO2,GasInjec.

• ChemicalInjec.

• VAPEX

Oil service contractors can be used in devel-oping short-run fields

2. Service oil contractors can be used in short-term oilfield de-velopment.

3. As the project cycle in Kuwait is too long, it needs to be re-duced, with flexibility in bud-geting.

4. Ensure that integration be-tween upstream, midstream and downstream across the K companies exists.

KOC’s plan looks forward to the development of heavy oil; the company is, therefore, exerting tremendous efforts through its various departments to put plans into place to implement KPC’s 2030 strategies in order to start launching the project as fast as possible.

Figure no. 2

The Heavy Oil production methods

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