KPC expected to invest USD 100 bln over five years – CEO

KUWAIT, Jan 26 (KUNA) — The Kuwait Petroleum Corporation (KPC) is expected to invest up to USD 100 billion over the coming five years to achieve the strategic directions of the oil sector until 2030, CEO Nizar Al-Adsani said on Tuesday.
“We anticipate an expenditure of 100 billion dollars over the next five years to achieve this target, half of which is already committed to specific identified projects,” Al-Adsani told the Energy Strategy Forum that kicked off here today.
Meanwhile, Al-Adsani noted that “low oil prices have been a prominent feature of the market since the second half of 2014, and could stay lower for longer; posing challenge to our industry, but providing an opportunity to structural reforms, to achieve long-term benefits for countries.” He pointed to forecasts that global exploration and production (upstream) spending would fall from about USD 850 billion in 2014, by more than 20 percent, in 2015, while the level in 2014 over 2013 had increased by 3 percent.
It will take time, probably two years for these changes to have an effect on future supplies. Global upstream spending is expected to decline by 18 percent in 2016. This would be the first time since 1986, that consecutive declines in spending were recorded, he said.
It is a common sense that mature producing fields globally have an average decline rate of around 5 percent, while world oil demand will continue to expand at a range of 1 – 1.5 million barrels per day annually, which means that the world markets would need some 5 – 6 million barrels per day of new crude annually, the CEO noted.
This shows the importance of continuity of investments in the upstream globally for the sake of stable markets, and to avoid volatility as well as spikes in oil prices.
Producers of crude oil have financial surpluses and tend to redistribute income via investment. The scale of the global effect is significant, he said. That boost is then amplified if it generates a subsequent lift in confidence, encouraging companies to invest and spend.
“We, at Kuwait Petroleum Corporation recognize that it is also a great risk if we do not make investments,” Al-Adsani stated. (Pick up previous) osj.jk.msa