HIGHEST PRIORITIES

Kuwait 2017 | ENERGY | INTERVIEW

TBY talks to Abdulnaser Y. Alfulaij, CEO of Kuwait Gulf Oil Company (KGOC), on the Al-Khafji JV with Saudi Aramco, the private-public sharing model, and human resources.

Abdulnaser Y. Alfulaij
BIOGRAPHY
Abdulnaser Y. Alfulaij was appointed as CEO of KGOC in January 2016. He started his career in 1988 with KOC, serving in progressive roles before joining parent company KPC in 1997. In 2001, he started with KUFPEC, the subsidiary responsible for exploration activities abroad, for which he extensively travelled to China and Australia.

KGOC is responsible for the Partitioned Neutral Zone (PNZ), where you operate, amongst other fields, the Al-Khafji JV with Saudi Aramco. What are your growth plans and the collaboration here?

The Khafji field was a concession that was given to the government of Japan, and when that concession expired, Kuwait and Saudi Arabia signed a joint operations agreement, with the contract representatives from KGOC and the Aramco Gulf Oil Company sharing the resources. The resources are vast, and production can be significant but the seizure of operations, by a joint governmental decision, has put extraction on hold for now. The Al-Khafji Joint Operations entity is still active, and currently working to keep all the facilities up to the HSE standards and ready to resume as the safety of our staff and the environment are our highest priorities. The decision to restart will come from the ultimate owners, which are the two governments. Everything underground is 50-50 and above ground also the agreement says 50-50 in terms of numbers of persons, 50% from Kuwait and 50% from Saudi Arabia. There is a rotation mechanism within the joint operations, and the development plan is build under the guidance of both companies, also under a 50-50 agreement.

With privatization on the agenda for some of KPC's subsidiaries, what are best practices from the private-public sharing model?

The private presence comes in the form of Saudi Arabian Chevron (SAC), which is not on our side. The Kuwaiti assets are not privatized, and our joint venture partner to us is one entity, representing the Kingdom of Saudi Arabia. We are encouraging private participation in the areas of oil field services, development of technology and engineering construction, so that the desired skills and capabilities are available in the local market.

What is your vision for Kuwait being the region's next downstream hub, what does this mean for KGOC, and what synergies do you strive for within KPC?

What is happening on the downstream side and in the petrochemicals industry is excellent, both for the industry and for the country. The fourth refinery is a strategic decision by the government and will spur diversification. Our crude oil products from both onshore extraction in Wafra and the offshore in Khafji go directly to the KPC network of refineries and exports. Part of our production is gas, although not in large quantities, and this goes directly into the KPC's gas network, which primarily fuels production and petrochemical industries.

Are you looking into new innovations to extract heavy oil in more efficient ways?

KGOC has a history in terms of heavy oil extraction, as we have a lot of reserves, and both our JV partner and we are keen on developing these resources. We have started some pilot projects in terms of steam injection and steam recycling, but this was put on hold once activities were frozen. Once we restart, we are more than ready to increase our production capacity, to diversify our product specifications, and to generate a learning curve for our staff on heavy oil development. We have already been passing this technology to our sister company KOC. It is looking into offshore lately, and we have expertise there as well. All companies eventually serve the KPC group and follow a joint strategy, which makes it easy to find synergies.

How could industry demands be better aligned with graduate employability?

The petroleum sector has demanded that many times, and we do believe that our education strategy could be improved to serve the industry better. Many ministers of education have strived for this, but it takes time to change direction. There has been a shift in recent times, and the sector itself has been supportive too. We have good talent development programs for our employees. As our operations were frozen for two years, we have used the time to build HR capacity, but talent development is much faster when there is actual drilling going on. In the current context, the most important thing is to bring our staff, both in the joint operations and the head office, to the highest standards, in terms of technical development, HSE, business processes, and general guidance for best practices. We want to bring them all to the level where the language spoken by everybody here is on par with when they meet with Chevron or Aramco. So we are not sitting idle; we are investing in people. It is a major investment for us and we will not be hesitant to spend resources to develop the people.