KUWAIT - Transport
Chairman, Kuwait Oil Tanker Company (KOTC)
Before his appointment as chairman of KOTC, Bader Nasser Al-Khashti worked in other subsidiaries of the Kuwait Petroleum Company (KPC). His previous and longstanding duty was with the Kuwait Foreign Petroleum Company (KUFPEC), where he served as chairman & managing director. He was responsible for business development of oil exploration activities outside of Kuwait, and he was pivotal in leveraging Kuwait’s accumulated experience in this field in the international arena. He also served as managing director of research and development & HSE at KPC, the parent company.
In general we are all under the same strategy and the same targets, which are set by KPC. Our task is to transport all the crude and processed products to the customers that KPC deals with. KOTC is the operator in the transportation area, and our activities are directly linked to KPC’s customer demand. We align ourselves with the strategy, and since KPC has committed to 3 million bpd by 2020, we have been investing in fleet capacity. In the end, all KPC subsidiaries perform as a team to deliver the targets that are set. For example, if KNPC invests further in an LPG plant with a LNG delivery point, we will invest accordingly in our fleet and purchase LNG carriers. Thus far, gas is only for domestic use, primarily to fuel operations in the power plants and refineries. As industrial demand is growing, and consumer demand also increases, we might expand our gas facilities or import more. There is a dream that one day we will have LPG connected to our residential areas, but that involves carrying LPG across the oceans for us.
For the fourth phase we are talking about a fleet renewal and expansion scheme to construct one very large crude carrier (VLCC), three LPG carriers, and four medium range (MR) carriers. For these investments, we have taken into account two main factors; the age of our current ships and the manufacturing time of new ones, as well as the anticipated demand of KPC. Phase III has been executed well and came in ahead of time. With the increased capacity we have been quite comfortably meeting the demand growth thus far, and with Phase IV we should be getting ahead of that. Korean companies have historically been our primary contractors here, and we find them proficient, professional, and prompt in delivery. They were chosen through a bidding process and have shown reasonable pricing and great capabilities.
We are certainly committed and even before that agreement we strived for safety with all of our ships, taking into account every environmental measure that we can. Of course, our activities are subject to international rules and regulations, and we also enforce our own. Incidents may happen, and whenever something happens anywhere in the world, we recheck our own operations to secure our safety on the ocean. We closely collaborate with the International Maritime Organization, and with insurers and brokers to understand what the latest safety measures are. KOTC has been distinguished as one of the global leaders in safety.
KOTC should be autonomous. Today we are tied up with KPC, and we should focus more on business development within KOTC. It is in our line of business to see if there are any opportunities that KOTC can enter into in order to increase our profitability. I would like to see KOTC be more dynamic and flexible and become a truly international company. To do this, we are considering putting a business development unit in place to study those opportunities in the market. These markets could be anywhere, as Kuwait is limited and the world is an open ground for everybody to take their horses and run. Interestingly, KOTC started as a private company in 1957, as a pioneer in the sea transportation of crude oil. In 1976 the government decided it was imperative to join and started with a 49% stake in the entity. Three years later KOTC was fully owned by the government. Because we started as a private company, we still have the entrepreneurial DNA and should leverage that.
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