Kuwait’s Supreme Petroleum Council has endorsed a request to sharply increase the budget for a new refinery after most of the bids exceeded initial estimates, the oil minister said yesterday.
Ali Al Omair said the figure for the Al Zour refinery was increased by KD871 million ($2.9 billion) to KD4.8 billion ($15.85 billion).
That came after bids for most tenders for the five packages constituting the refinery project came in higher than the estimated cost.
Tenders are now expected to go ahead, and some contracts are likely to be awarded as early as next month.
The initial capacity of the state-of-the-art refinery was 615,000 barrels per day, but Al Omair said the capacity will now range between 600,000 and 800,000 bpd.
Last year, Kuwait awarded tenders for a $12 billion project to upgrade two of the three existing refineries.
When that work is completed by around 2018 and the new refinery is built, Kuwait’s refining capacity will increase to 1.4 million bpd from 930,000 bpd currently.
Al Omair said an estimated $60 billion will be spent on oil projects over the next five years to modernise the oil sector and to raise production capacity to four million bpd.
Kuwait says it sits on 10 per cent of the world’s proven crude reserves and is pumping 2.8 million bpd.
Oil producing countries expect global economic growth in the coming period to boost oil prices, said Al Omair.
“There is satisfaction among member states with indications of better growth of the world economy,” said Al Omair.
“We do not look at the amount of production, but what concerns us primarily is the rate of growth of the world economy, which will bring the required balance to keep prices at the desired level.”
Al Omair also said Kuwait had a special relationship with importers in Asian, European and other markets, so it would be able to maintain its share of world oil markets.
He said Kuwait was confident of being able to carry out its oil strategy for the period to 2020, and was continuing plans to raise its crude oil production to four million bpd. Output in June this year was 2.74 million bpd.