What are some important transactions and acquisitions by KUFPEC in recent years and how would you describe the company's current position?
KUFPEC is firmly heading toward its 2030 strategy of reaching 200,000 bpd compared to its current 70,000 bpd production, increasing its reserve base to 650 million barrels, and increasing its operatorship to 20% by 2030. KUFPEC is confident that it is a valuable subsidiary to Kuwait Petroleum Corporation (KPC), providing its sister companies, such as Kuwait Oil Company (KOC) and Kuwait Gulf Oil Company (KGOC), a significant role in upstream technology transfer, best practice initiatives, and exploration and production know-how. KUFPEC entered two promising and large projects in 2014 as part of achieving the 2030 strategy. The first was doubling our equity stake in the Wheatstone LNG project in Australia. This transaction will further add to our material production that expects to receive its first gas in 2017. Furthermore, the Wheatstone project is a strategic element not only for KUFPEC, but also its parent company, KPC, providing priority to KPC to be supplied with Wheatstone LNG if required, meeting at least 10% of KPC's energy needs in the long term. KUFPEC's second large transaction in 2014 was entering a joint venture with Chevron in the Kaybob region of the Duvernay shale play in Alberta, Canada. This large transaction provides KUFPEC with substantial material production for decades to come, adding an estimated 25% of our overall production by 2030, thereby securing the future of KUFPEC.
How has the drop in oil prices impacted your operations?
The price collapse we witnessed at the end of 2014 caused serious repercussions for KUFPEC's balance sheet. Having said that, it is with pride that we achieved a net profit of $40 million, surpassing our entire peer group who had all shown losses for 2014 due to oil prices remaining low. We are seeing the new norm in price terms for the foreseeable future, and a quick snap back to higher prices such as the $100 we saw in 2014 is unexpected for the time being. With the price of oil down, costs have also deflated, creating an opportunity to execute our strategy by entering new acquisitions and core business opportunities in the coming years.
What is your approach to investing in human capital, and particularly to attracting Kuwaiti employees to KUFPEC?
KUFPEC's most valuable investment is its people and its employees. Our successful investment is due to our competent, qualified, and successful team. KUFPEC invests heavily in developing professional career paths for our younger employees, and encourages its people to spend time working for KUFPEC in our offices and operations. The opportunity to develop and grow our human capital is necessary, since KUFPEC will ultimately be running more and more projects that we will operate in the near future. The Kuwait oil sector has always been an attractive employer and the industry of choice for young Kuwaitis, not only for petroleum related engineers but also for financial and legal backgrounds as well. Such employees are driven to work internationally and are bilingual.
What are your expectations for 2016?
2016 will be an extremely busy year for KUFPEC, with the final progress for completion of the Wheatstone project leading the way. We expect also to increase our production level, with more operatorship activities. We will do all of this by first developing and empowering our employees to solidify KUFPEC as a partner of choice in the International E&P business.