Kuwait Oil and Gas Market - Growth, Trends, and Forecasts (2020-2025)

The Kuwait oil and gas market is expected to grow at a CAGR of over 3% during the forecast period. Factors such as increased resilience of ambitious target of achieving crude production to 4 million barrels per day by end of 2020, along with the presence of an estimated 101.5 billion barrels (bbl) of oil reserves as of 2018 are expected to drive the oil and gas market during the forecast period. Moreover, several downstream projects are also underway which are likely to bolster the market in the coming years. However, the volatile crude oil prices and the government’s plan to increase the share of renewables in the energy mix is expected to hinder the growth of the market.

• Kuwait's downstream sector is expected to be the fastest-growing segment, owing to increased investments and upgradation projects in the refinery sector during the forecast period.
• Price reforms by the government and increase in demand for energy efficiency are expected to create several opportunities for the market players in the Kuwait oil and gas market.
• Despite the decline in global oil prices, Kuwait signaled continued commitment to its stated production targets and investment programme and has ambitious oil and gas production targets which are expected to drive the market during the forecast period.

Key Market Trends

Downstream Sector to be the Fastest Growing Segment

• A major overhaul of Kuwait's downstream sector is underway, following the award of long-delayed contracts for the al-Zour refinery and upgrades at al-Ahmadi and Mina Abdullah, which are expected to drive the downstream sector during the forecast period.
• Moreover, Kuwait’s USD 12 billion Clean Fuels Project (CFP) is expected to be completed in mid-2020 and the USD 16 billion Al-Zour refinery is set to become partially operational in June, increasing the refining capacity of the country. Kuwait's downstream capacity is expected to reach 1.4 million barrels per day (mbpd) by 2020
• The CFP will integrate the 270,000 barrel-a-day (b/d) Mina al-Ahmadi and 466,000 b/d Mina Abdullah refineries into a single complex, with new units added to increase total capacity to 800,000 b/d and improve the quality of output. A total of 16 new units are being built at the Mina Al-Ahmadi refinery as part of the CFP, and 14 new units are being built at the Mina Abdullah refinery.
• Therefore, with increased investments of over USD 10 billion in the petrochemical and refinery projects, Kuwait’s downstream segment is expected to the fastest growing during the forecast period.

Ambitious Oil and Gas Production Targets to Drive the Market

• Kuwait has planned to invest over USD 100 billion between 2018 and 2023 in the oil and gas industry to boost production. These investments are majorly done, in order, to increase the crude production capacity from the current levels of crude oil and natural gas production.
• Moreover, for the natural gas, Kuwait will increase production from 200 million billion cubic feet (bcf) per day to several folds by 2025 and beyond.
• As of 2019, nearly all of Kuwait’s crude oil production comes from onshore fields, but there are now active attempts to expand offshore production capacity. New investments are expected to be done in offshore oil and gas exploration and production in the coming years.
• Also, Kuwait has begun chemical injection into a heavy oil field in the north of the country. The enhanced oil recovery (EOR) technique, which improves the mobility of residual oil through the reservoir, is the first of its kind to be applied in the Middle East and will attract investments by many oil and gas companies.
• Therefore, the above mentioned factors are expected to increase the production and drive the market during the forecast period.

Competitive Landscape

The Kuwait oil and gas market is partially fragmented. Some of the key players are Kuwait Petroleum Corporation, Boubyan Petrochemical Company, Royal Dutch Shell PLC, Chevron Corporation, and BP PLC.

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