Throughout its history that extends for more than eight decades, KOC has been participating in most international conferences, exhibitions and activities related to the oil and gas industry. The Company strives to gain more expertise, with a desire to acquire appropriate and state-of-the-art technologies and trends to apply in its operations, as well as to showcase its pioneering expertise in several areas.
From this standpoint, the Company recently participated in the Abu Dhabi International Petroleum Conference and Exhibition “ADIPEC 2019" with a delegation that included Manager, Public Relations and Information Group Mohammed Al-Basry, Manager, Gas Operations Group Hamad Al-Zuwair and Manager, Contracts Group Aisha Al-Sulaili, as well as a number of Team Leaders employees from different disciplines.
Within the framework of the activities of the conference, which is considered one of the most important international gatherings for the leaders of oil and gas industry, the Company, represented by a number of groups, delivered nine distinctive presentations, in which employees addressed various aspects of its operations and activities, over four days. The following article sheds light on KOC participation by summarizing the highlights of the nine presentations.
Planning and Strategy
Farah Ali, from the Planning Group, delivered a presentation in which she overviewed the oil sector 2040 strategy. She reviewed the ratings of KPC subsidiaries in terms of activities. Then she touched on the ambition of the KOC to be an upstream leader recognized globally for excellence, and to continue to enhance it, as it is distinguished in exploration and production operations. Moreover, she discussed KOC's mission that aims to optimize the value of Kuwait's hydrocarbon resources in the most efficient way, through exploration, development and production to ensure sustainability.
Ali also highlighted the Company's values of integrity, excellence, partnership and commitment to health, safety, security and environment, innovation and team work, caring for people, and pride.
She summarized the strategic objectives of the Company by striving for world-class operational excellence in line with international standards, optimizing portfolio management in the optimal manner, as well achieving sustainable crude oil production capacity and non-associated gas. The objectives include replacing reserves with a view to sustain production, steward technology and capability transfer, as well as managing stakeholders actively.
She pointed out that the targets of KOC include approval of new onshore and offshore exploration and development programs, to ensure adding proven reserves. She maintained that there are many opportunities in many areas such as developing heavy oil, oil extraction and recovery in unconventional ways, marine exploration, and developing non-associated gas production.
Innovation & Technology
Farah Al-Salem and Saud Al-Selemi from the Innovation & Technology Group delivered the first of a two-parts presentation. The first part touched on the importance of research as KPC 2040 strategy focuses on the role of innovation in achieving production targets.
The presenters recalled that the technology road map in KOC establishes research projects that will be undertaken, with a view to address the challenges facing Kuwait's upstream assets. They explained that the Group has been executing a number of research projects across different platforms, as it seeks to be at the core of a new innovation ecosystem by establishing research partnerships with companies, research institutes and academia.
They pointed out that the Centre of Excellence includes a network of technical experts across upstream who seek to define and apply global best practices. The group is endeavouring to establish the "Kuwait International Petroleum Research Centre ".
In the second part of the presentation, Hussein Al-Tamimi indicated that the group has grown through several stages since its establishment in 2003 as Surface & Subsurface Teams, until was approved in 2019, where several teams have been established and included, as the Innovation and Technology Group.
Al-Tamimi addressed the group's strategic targets, which include maximizing the strategic value from oil, realizing the potential of gas, growing reserves, striving for excellence in performance, enhancing compliance with health, safety, security and environmental standards, and benefit from advanced technology.
He explained that the group's areas of interest include well productivity, information solutions, drilling and completion of wells, energy, health and safety, smart fields, water management, enhanced oil and gas extraction, reservoir technology, exploration and production information management, and heavy oil.
Journey of Exploration
For his part, Khalaf Abdulaziz from the Exploration Group reviewed the journey of oil exploration that started with commercial quantities of oil, export operations, and the development of drilling operations, up to the discovery of Jurassic oil in 1984, the establishment of the group in 1995, the discovery of new reservoirs, and the quest to increase Kuwait's proven reserves.
Abdulaziz pointed to the role assigned to the Group with the aim of striving for excellence in exploration operations, cooperation with other groups, and the exploitation of technology, as the Group is working on developing a road map in line with the KPC strategy, and managing a diversified portfolio of hydrocarbon projects in Kuwait with optimum capabilities.
Reflecting on the Group's activities, teams and achievements, which culminated in the 3D seismic survey project “Kuwait Bay", which included complicated surface conditions such as urban areas, cities, hydrocarbon facilities, deserts, farms, military areas, sabkha, and shallow and deep marine, and led to the discovery of heavy and light oil in a number of formations in different regions.
Abdulaziz concluded by discussing the challenges of exploration such as offshore 3D data acquisition and processing due to shallow water and transition zone. He pointed out to offshore drilling operations, understanding of geological and geophysical systems for reservoirs in deep formations, as well as conducting testing design, stimulation and completion of unconventional reservoirs. Other challenges include testing mechanisms of high pressure and temperature reservoirs which are characterized by high levels of H2S.
Drilling Engineering
Sara Hayat from the Drilling Engineering Group delivered a presentation in which she reviewed the Group's vision and mission, as it forms the core of the Company, and carries out all drilling and workover activities. It provides engineering support for operations in reservoirs, in research and technology, well surveillance, contracts and capital program planning. It also plays a major role in achieving the Company's target production plan, in accordance with 2040 strategy, through utilizing new drilling technologies.
Hayat pointed out that the group faces challenges in some projects, such as Paleozoic Wells, which are characterized by high pressure and heat (beyond 20.000 ft.), and Multilateral wells that are characterized by different pore pressure.
She also touched on existing projects, such as offshore drilling, which is a new frontier for KOC operations, and is expected to contribute to the target set for adding reserves of oil and gas production. She talked about the "Real-Time Drilling Decision Centre", which adopts the latest technologies, systems and advanced communication facilities that will provide the ability to monitor drilling operations.
Finally, there is the "Drilling Fluids Lab" that supports drilling operations, by ensuring that the specifications of drilling fluids comply with the approved program, as well as designing special systems for specific wells, in terms of quality of drilling mud and cement.
Reservoir Engineering
Hadeel Abdulrahem from the Reservoir Engineering Group delivered a presentation KOC's Enhanced Oil Recovery Journey, in which she maintained that EOR plays a substantial role in supporting the 2040 strategy, as its implementation represents a major opportunity for the Company, whereas KOC strategy is to develop EOR capabilities and infrastructure to ensure meeting production expectations.
Abdul Rahim discussed typical EOR techniques for improving oil extraction and future prospects, in light of previous activities and future plans, stressing that clear strategic initiatives are driving the Company's endeavours.
She explained that the Company focuses on elements of strategy and organization, and the study of feasibility and experimental designs in improving oil extraction. There are operations that aim to conduct experiments and tests on wells and study the results and benefits that support the Company's objectives, and thus increase activity.
She pointed out that the Company's EOR plan depends on three pillars that include selection through feasibility pilot designs, to enable the achievement of EOR targets. She pointed out that the plan adopts several methods to improve EOR, including thermal, injecting chemicals or miscible gas, and low salinity and chemical.
She described major challenges facing EOR operations, including geology in terms of understanding performance and conformance of reservoir, injectant availability as sourcing CO2 and chemicals is a costly and complex process, capital and operating expenses. She made some recommendations to improve performance.
Pre-qualification
Ahmed Al-Rashedi and Dana Al-Qadeeri from the Commercial Support Group delivered a presentation on pre-qualification of contractors and manufacturers to secure contracts from the Company. They indicated that pre-qualification process aims at listing various companies, where KOC requires technical expertise, financial solvency and high standards in health, safety, environment and quality for applicants.
They explained that this is done through the Supplier Relationship Management Team, and that there are categories and sub-categories covered by the process of qualification in the Company's areas of operation, such as drilling, technical support, research and innovation, consulting services, well surveillance services, marine services, geophysical services, information technology, inspection, corrosion, and protection services, and more.
The presentation also touched on qualification steps for contracting companies and manufacturers, which must meet the requirements of the Company in all areas. Every step is subject to a rigorous evaluation and audit process prior to full approval, following the publication of announcements in the Official Gazette and selected local and international newspapers, as well as newspapers of the GCC states.
The Importance of Contracts
Manager Contracts Group, Aisha Al-Sulaili, along with Sabeeka Al-Qadeeri, delivered a presentation on the procedures, requirements of contracts. They provided an overview of the Group's responsibility of handling and streamlining the contracting process for projects and services, by developing guidelines and procedures based on international practices, market analysis and risk analysis.
They explained that the Group is the focal point for communications with prospective contractors prior to awarding contracts, as it seeks to improve and enhance various contract models, in accordance with global trends, and to enhance the participation of local and international contractors.
The presentation touched on classifications of tenders and bidding types, such as Competitive Tenders (Mumarasa/Negotiable), Competitive Tenders (Non-negotiable), Single Source Direct Contracting.
The presentation touched on the requirements for participation in the open and restricted tenders of the Company, where contractors who are interested to participate in KOC Tenders are required to register their company with KOC through eBusiness Portal, and with Central Agency for Public Tenders (CAPT).
As for open tenders participation is open to all bidders having the capability and experience to perform the intended works/services. Restricted tenders may be issued to lists of bidders already pre-qualified/approved by KOC, CAPT or other State bodies under their respective approved categories of works/services.
Then, statistics were presented on the contracts signed by KOC and their value, and the presenters explained the current and future opportunities and prospects, where the Company's 2040 strategy to increase production of hydrocarbon recourses with cost optimization. Also, there is a broad spectrum of business opportunities and high magnitude of services and works, like huge pipelines networks. On the other hand, offshore activities represent an emerging area with immense business potential. Emerging logistics requirements and opportunities to help the Company deal with new technological challenges, as it strives to develop technology based on alternative/renewable source of energy. KOC is committed to develop local business/industries with support of international companies, and to train local workforce starting marine exploration operations.
Purchasing & Materials
Omar Jumah, Purchasing and Material Management Group, delivered the last presentation, in which touched on the objectives of inventory control, to make certain that the materials are available to meet the required operational needs, ensuring the best value within the framework of contractual and regulatory obligations, ensuring full customer satisfaction, and endeavour to optimize inventory, and to have a proper balance of providing quality products to end users and preserving the cost saving factors.
The presentation also touched on blanket (permanent) purchase orders (BPO), according to which the supplier provides goods and services at a pre-determined price on a recurring basis for a specified period of time; where KOC started BPO back in early 2000 and has such contracts of the duration of 3 years (four to five years in some cases). Savings on these contracts totalled about 60 percent until last September.
Under the consignment BPO, the supplier gets monthly payments based on the material consumption report issued by the Company to the various asset groups. There are no restrictions on the nature of the materials in this type of contract, while the company takes into account the interest of the supplier, where formulas are used calculate price fluctuations. Consignment BPO brings a win-win situation both for KOC and its suppliers.
Jumah stated that one of the advantages of such contracts is that it reduces the inventory stock as the consigned items are not taken into account of inventory unless issued to any asset group of KOC. Any payment will be made only for consumed/issued material from Consignment Stock. Furthermore, suppliers will save money in marketing and acquiring customers. Among the benefits, we can refer to timely delivery of material to meet seamless operation of production and emergent needs. Total savings on these contracts could be 22 percent.
The presenter concluded by noting that based on the case study of 7 different groups of chemicals, it was noticed that considerable amount of savings ranging from 14 – 44% (approximately). This encouraged KOC to initiate Consignment BPO for as many commodities as possible.