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Progress & Prosperity



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Contents Pages

HISTORICAL INSIGHT

EXPLORATION & DRILLING OPERATIONS

STRATEGY (2020)

DRILLING OPERATIONS

FIELDS DEVELOPMENT

PRODUCTION (EXPORT & MARINE) OPERATIONS

HEALTH, SAFETY & ENVIRONMENT

GAS MANAGEMENT GROUP

TRAINING & DEVELOPMENT

MEDICAL SERVICES

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Information Team

Public Relations & Information Group

2008



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Kuwait Oil Company (KOC) was established in 1934under joint ownership agreement between the An-glo-Iranian Oil Company, now known as British Pe-troleum and Gul Oil Corporation known today asChevron. The company was given ree concessionrights to explore and produce oil in state o Kuwait.Exploration activities began soon ater; surace geol-ogy studies and gravity surveys were conducted.In 1936 KOC drilled the first exploratory well innorth Bahra area but the results were not encourag-ing enough to continue.In 1938 oil was discovered in Burgan well–1. Duringthe ollowing years, eight exploration and appraisalwells were drilled which established “Burgan” asone o the largest producing oil fields in the world.However, drilling and production operations weresuspended due to the eruption o World War II. A-ter the end o the war in 1945, operations were re-sumed and the eight drilled wells produced at a rateo 30,000 bpd. Surace acilities, pipe lines, exporting

acilities… etc had been constructed and Kuwait was

ready or new era o prosperity.In June 30, 1946 His Highness the late Sheikh AhmadAl-Jaber, then Amir o Kuwait, inaugurated the firstshipment o oil when he turned the silver wheeledvalve to start loading o the first flow o oil onto the12,000 tonne “British Fuzilier” tanker.Following the early success, more appraisals anddevelopment well were drilled in Burgan field to in-crease production. In 1951, explorations operationswere extended into Magwa and Ahmadi ridge area,oil was discovered and production began rom theMagwa field in 1953.

Exploration activities continued in the ollowing years

leading to the discovery o Raudhatain field in north

Kuwait and Minagish field in west Kuwait in 1955.

In 1974 a partnership was ratified by Kuwait Nation-

al Assembly giving 60% control o the operations

and acilities o KOC to the State o Kuwait while

remaining 40% were divided equally between BP

and Gul.



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In 1975 the Kuwait government assumed ull owner-ship o the company.

In 1980, it was about time to organize the oil sec-tor. Kuwait petroleum Corporation (KPC) was estab-lished by an Amiri Decree.KOC was given the responsibility o on-shore off-shore exploration, drilling, development, and pro-duction o hydrocarbon in the state o Kuwait.In 1981 KOC conducted an on-shore off-shore 2Dseismic survey or development and explorationobjectives. This was ollowed by successul drillingprogram to increase production rom the discovered

fields. In 1983 KOC commenced its first off-shoreexploration drilling. Four prospects were drilled us-ing Al-Baz rig with no economical discoveries but oilshows were reported.Between August 1990 and February 1991, nearly80% o KOC producing wells, installations and acili-ties were destroyed in the wake o the Iraqi invasion.

Their complete restoration in less than our years wasachieved as result o the remarkable level o coop-eration between KPC subsidiaries, and in tribute toKuwaiti National pride.H.H the Amir Sheikh Jaber Al-Ahmed Al-Jaber Al-Sabah personally capped Burgan 118 on November

6, 1991, 18 months ahead o international orecast. This was the result o more than 700 oil wells setablaze by the Iraqis. The first post-liberation ship-ment o 1.64 million barrels o crude oil let Kuwaitin July 1991, by September o the same year newwells were under construction and crude oil produc-tion once again exceeded the two million barrels perday level by February 1993.

The strategic goals o KOC were to increase oil andgas reserves and production. Plans were establishedollowing the liberation. In 1995 extensive explo-ration and development programs were designed.

Thousands o 2D, 3D and 4D Seismic data were ac-quired over the whole land area, Bubiyan Island andtransition zone. In December 30 o the same yearthe company signed a contract with Chinese Petro-leum Corporation to build gathering centers 27 and28 in west Kuwait. In January 9, 1996 two rotaryplatorms were constructed.In March 1997, the Ahmadi Park was renovated,decorated and reopened under the patronage othen Ahmaid governor Sheikh Ali Jaber Al-AhmadAl-Sabah. In March 1998, Ahmadi sports day was re-celebrated ater the company has rebuilt the sport-ing, entertainment and social acilities.



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quantities o light oil in Bahrah Field in the very

first Jurassic well. The post-acidization test resultsthrough 32/64” choke @ 4860 BOPD, API: 44°, GasRate: 12.670 MMSCFDRA-230 (2005-Middle Marrat) Oil: 4963 BOPD,Gas: 14.0 MMSCFD, FWHP: 5933 PSI,RA-236 (2006-Middle Marrat) Oil: 5245 BOPD,Gas: 15.2 MMSCFD,

These discoveries (RA-230/236) have confirmed theextent o high quality oil in Raudhatain structure.RH-02 (2003-Marrat,2004-Najmah/Sargelu) explor-atory well Middle Marrat interval was tested andthe well flowed 46 API OIL @ 2352bopd o oil with

GOR o 1627sc/bbl. Najmah/Sargelu interval wastested and produced light crude (52o API) @5702bopd with GOR o 2582 Sc/bbl and associated gas@ 14.7 MMSCFD.

The highest quality oil in Kuwait and proved oil 1500eet deeper than the known Minagish field.UN-01(SA-215)_2005 Middle Marrat Test-1Gas rate: 16.8 MMSCFD, Condensate rate: 3052BCPD

Middle Marrat Test-2

Gas rate: 14 MMSCFD, Condensate rate: 2738 BCPD

Middle Marrat Test-3

Gas rate: 14.4 MMSCFD, Condensate rate: 2455

BCPD,

Upper Marrat TestGas rate: 10.206 MMSCFD, Condensate rate:1879 BCPD Najamh/Sargelu TestGas rate: 27.132 MMSCFD, Condensate rate:2153 BCPDNWRA-02 (Najmah/Sargelu)-2005 Has been thesecond gas condensate discovery in North Kuwaitrom Najmah/Sargelu. Gas: 19.1 MMSCFD, Con-densate rate: 3571 BCPD.Arifan-01(Marrat)-2006 Located SE o BurganStructure this well has produced oil @ rate 5357BOPDAPI: 42°, Gas rate: 8.336 MMSCFDUR-01(Marrat)-2007 Located on Minagish _ Ra-hayiah Trend the UR-01 have produced oil @:679 BOPD, API: 43UN-02(Marrat)-2007 has produced Gas @ rate:19 MMSCFD and Condensate @ rate: 2063BCPD These major light oil and gas discoveries have es-tablished Kuwait on the world map o gas pro-ducing countries.



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Oil Origin & Formation:Oil is ormed rom the remains o numerousanimals and plants that lived and died in the seamillions o years ago. Covered beneath hundredo tons o rocks and subject to high pressures

and temperatures, bacterial reactions take placein these organic materials to orm oil.

Locations o Oil:Oil exists within the porous layers o sedimen-tary rocks that have been trapped or millions oyears by a covering o non-porous “cap” rocks.Sedimentary rocks are ormed rom silt, sand orthe debris o shells precipitated at the bottomo ancient seas and it is these sedimentary rocksthat oil explorers search or.

Exploration:Exploration process is divided into several phas-es. It begins with identiying a specific locationin which geologists expect availability o main

actors or oil reservoirs ormation. At this point,geologists make recommendations to conductcertain geological surveys which are divided intoseveral types according to the type o inorma-tion needed to be collected. Such surveys areconcerned with studying physical properties oearth layers through conducting measurementsor physical fields on and near land surveys. Theimportance o these surveys is that they reduceexploration drilling risks. The types o these sur-veys are set out below:



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· Magnetic Surveys: These are used in the preliminary stages o ex-ploration and can be perormed on land, at seaand rom the air. Magnetometers are used tomeasure magnetic anomalies in the subsuracerocks to identiy possible sedimentary rock ba-sins and main drits where oil might be located.

· Gravimetric Surveys:In this method, earth gravity is measured toidentiy anomalies associated with oil entrap-

ments. These surveys can also be carried out onland, at sea and rom the air. The interpretationo this survey provides inormation on the depthto basement and the subsurace structural con-figuration.· Aerial Surveys:Picture and images taken rom aircrat or satel-lites are used to draw maps o geological andtopographic eatures on the earth’s suracethat indicates where oil may be trapped in therocks below. The images recorded can be pho-

tographic or radiant, i.e. measuring the reflec-tion, absorption and dispersion o electromag-netic wave spectra emanating rom the earth’ssurace. These methods are additionally used inengineering projects to select locations or pipe-lines, roads and buildings.

· Seismic Surveys:Using the inormation provided by the geophys-ical methods described above, the oil explora-tions will then carry out seismic surveys over

locations that indicate where oil is most likelyto be ound. Seismic surveys can be perormedon land, at sea and provide much more detailedinormation about the deposition and ormationo the subsurace geology. Structural maps andstratigraphic interpretations can be made rom2D seismic data. Advanced three dimensional(3D) seismic surveys provide even more accurategeological images o complex aults and oil trapsleading to ewer dry wells being drilled. Newtechniques make use o seismic data to measure



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rock porosity and permeability within oil reser-voirs. The our dimensional (4D) seismic surveyshave been recently introduced. This techniqueprovides inormation on the fluid movementswithin producing reservoirs. The accuracy o the results o the seismic sur-veys greatly enhances the success o explorationdrilling.Ater obtaining these surveys and analyzinginormation, geologists team perorm the nextphase which includes many geological studies

using the inormation gathered through geo-physical surveys in addition to inormation madeavailable rom neighboring wells, i any. Someo these studies are mentioned hereunder:

· Constructive Geological Studies:Concerned with the study o the Geology ostrata based on the structure and the changeso the appearance o traps and potential or oilentrapment within oil traps in addition to iden-tification o types o olds and drits that may

exist in the oil field and have positive or negativeimpact on traps according to type o layers.

· Sedimentary Geological Studies:Geological Studies including the study o sedi-mentary sequences in respect to the type orocks and entrapment mechanism, migrationbeore or ater the trap ormation and also thepresence o the sealing rocks or hydrocarbonpreservation.

· Basin Analysis:Concerned with the general studies o the sedi-mentary basins and their distribution, the typeso the sedimentary rocks, the geologic structuresand the potentialities o hydrocarbon occurrenc-es and the optimum location o entrapment andthe nature o the reservoir rocks and its exten-sion and geographic distribution.· Geochemical Studies:Method involves chemical principle to character-ize source rock, its thermal maturity or hydro-



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carbon generation and migration in basin and tocorrelate the oil-oil and oil source rock samples.In addition, to identiy various reservoir altera-tions o particular oil occurrence.

· Economic Feasibility Prospect Evaluation: The prospective evaluation is dual with econom-ics o the potential traps ater running the tech-nical geological & geophysical studies/surveysor defining the oil entrapment. The assessment

o the economical value o these traps is veryessential to show the elements o risk analysis,the oil in place and the recoverable reserves, theexploration and development cost estimates oreconomic easibilities.Ater completion o all required studies and iden-tification o economic easibility or the reservoirintended or exploration, geologists provide rec-ommendations which include explanation or allprevious phases in addition to one or two loca-tions that have been identified through studies

to conduct drilling indicating risk rate and the

difference between one site and the other.All these studies are then highlighted by drillingexploration wells to prove oil presence, wherethese wells may be drilled to intermediate ordeeper depths. Ater the completion o explo-ration drilling and oil has been discovered, theprospects are then transerred to the next phase,which is the delineation & appraisal drilling todefine the boundaries o the discovered fieldand to assess the recoverable oil reserves.

ه



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In 2005 Kuwait Oil Company launched its am-

bitious strategy or 2020 which aims to increase

production to our million barrels per day, in-

crease oil reserves and explore gas. Appropriate

and deliberate plans were developed to achieve

these objectives in all fields o exploration, drilling

and development. Exploratory drilling operations

resulted in many significant explorations o light

oil and gas. This gives importance and strategic

dimension to exploration operations and achiev-

ing the Company ambitious plans as well as es-

tablishing history o Kuwait joining gas producing

countries orum.

The strategy is based on the ollowing seven

axes:

1- Production Capacity

2- Increase Reserves

3- Gas exploration and Production

4- Health, Saety & Environment

5- Research & Technology

6- Regulatory Culture and the Company Image

7- Support Services



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Definition:Drilling is a mechanical process that requires specialtools and technology. Equipment is used to penetratethe earth to recover oil and gas found in the subsurfacelayers.Once an exact spot on the surface is determined, drillingoperations begin. Drilling operations are in accordancewith a schedule indicating the depth of the well and thedifferent size casings to be placed in the well at differentdepths. These casings are used to protect the well fromcorrosion and to prevent fluids from entering the hole.

Drilling fluid:Drilling fluid or mud is basically a mixture of water, clay,minerals and chemicals. Drilling mud is pumped downthe hole through the drill pipe and the drill collars andexits at the bit through the nozzle and heads back upthe hole to the surface through the annulus, a spacebetween the outside of the drill strings and the wall ofthe hole.Drilling fluids are used to:- Flush cuttings from the hole.

-Cool and lubricate the bit and ease the rotation of its

cones.- Support the walls of the well from caving in and pre-vent the flow of gas and oil into the formations duringdrilling operations.Casing and tubing:Casing and tubing are precision made steel pipes ofvarious sizes and specification. At intervals a drill holeis lined with “casing” which is inserted from top to bot-tom and cemented into position.

Main uses of casing are:- To control high and low pressure formations.- To prevent the hole from caving in.- To replace the flow of oil “production from casing”.- To produce oil from different formations, “dual pro-ducer”.Drilling Techniques:Wildcat drilling is considered one of the most expensiveand difficult drilling of all. This type is carried out todetermine whether gas or oil accumulations exist in theexplored area. Another drilling technique is develop-mental drilling.

Work-over operations are carried out by work-over rigs.



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When the rig moves over a well, first the well has tobe stopped flowing or “killed”. This is usually done byforcing the oil back into the formation with pumpingsuitable saline fluid to overcome the production pres-sure. When the well is killed, the Christmas tree canthen be removed and blowout prevents are fitted, af-ter which the tubing can be pulled out of the hole andwork-over is carried out. Since the first well was drilledin search for oil at mid 19th century, there have beenmassive developments in the tools, technology andmethods of drilling. The rotary drilling technique allowsus drill to greater depth in shorter periods of time. Thiswas followed y turbine drilling which used the turbinesinside the well to directly rotate the drilling bit.Due to the awkward location of some drilling sites inresidential, archeological and offshore areas, directionaldrilling was developed. Also in line with these develop-ments is the horizontal drilling which became anothermethod used in production. It is also one of the meth-ods used in supported recovery. In comparison withother production methods, horizontal drilling increasesproduction rates, as well as the percentage of oil recov-ered from the reservoir.

Offshore Drilling:Offshore Drilling is very similar to onshore, the chief dif-

ferent being the rigs used to drill offshore wells.

The rigs used to drill offshore wells are installed on mo-

bile platforms pinned to the seabed by means of piles

driven into the sea-floor. They can be moved easily from

one location to another. The platform is designed to

hold the equipment, drilling materials and small facilities.

Offshore drilling cost is higher than terrestrial drilling.

Drilling wells in Kuwait:

The wells in Kuwait are drilled vertically. Within these

wells are wells of lesser depths, beginning at a depthof about 850-7000 feet and averaging to about 7000-12000 feet. There are much deeper wells of about20,000 feet.Recently, Kuwait Oil Company has introduced a num-ber of modern techniques, the most notable of which ishorizontal drilling. This type of drilling method is car-ried out drilling a vertical hole to the producing zone,then followed by horizontal drilling. The advantagesof this type of drilling are that it increases productionfrom certain formations and reduces the cost over thelong-term.The Company is currently carrying out deep exploratorydrilling to search for new formations and to prospectfor gas.

Drilling Workshops:Workshops and Stores carry out the following:- The storage of equipment and materials required fordrilling operations.- Coordinate between the concerned parties and theDrilling Dept.- Planning and scheduling of drilling rig movement.

- Supply and provide materials and equipment to thedrilling sites.

Drilling Water Wells:In addition to the drilling of oil wells, there are also wa-ter well drilling operations. These wells are drilled inorder to supply rigs and Gathering Centers with water.Also, wells are drilled to protect oil wells from corrosion,referred to as cathodic protection.



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1- RESERVOIR GEOLOGY

Oil is usually found in pores and vugs of res-

ervoir rocks. These rocks are in most of the

cases of sandstone, limestone or dolomite

and found underground at different depths.

Some reservoir rocks in Kuwait are at more

than 7 kilometers depth.

The amount of oil or gas in the reservoir rock

depends on many rock physical properties

out of which porosity (percentage of rock

pores to the rock and total volume), per-

meability (how easy fluids can pass through

rock pores), oil saturation, net pay thickness

and reservoir geometry (Geological struc-

ture) are part of it. By determination of all

these reservoir physical parameters, strategic

oil reserves can be calculated and economi-

cally evaluated.

Identification of type of structural traps is

considered as the main part in setting the

proper Geological Model for each reservoir,

which in return facilitates setting the opti-

mum Field Development Plan for the reser-

voir.

Kuwait Oil Company is currently utilizing

what is considered as top of the art in hard-



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ware and software technology in oil industry

in order to calculate accurate reservoir rock

physical properties and set a most accurate

Geological Model for Kuwaiti oil fields. This

goes side by side with the huge measure-

ments and studies in lots of directions where

the following are to be mentioned.

Seismic Survey:

The surface and well seismic survey is con-

sidered as the first step in exploration and

development of oil fields. It helps to iden-

tify the structural and stratigraphic traps that

can be considered as promising in hydrocar-

bon content. Therefore, Kuwait Oil Com-

pany has performed what is considered as

vast 2D and 3D surface seismic survey onall onshre and offshore land of Kuwait state.

Extensive processing and interpretation of

the seismic data have followed this survey in

order to improve the geological model of all

reservoirs.

Wire-Line Well Logging:

International logging contractors working in

Kuwait are providing wide range of logging

service, processing and interpretation of log-ging data in oil wells on daily basis. These log

data are the only way to predict the physical

properties of the reservoir rock. Each log-

ging tool works on a specific technique to

measure one of the natural responses of the

reservoir rock. These responses are inter-

preted later to calculate the physical prop-

erties of the reservoir. Logging technology

is subject to daily development and lots ofhigh tech tools are introduced to the mar-

ket from time to time. Kuwait Oil Company



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is considered one of the leaders in the area

in utilizing all the new in this career for the

benefit of Kuwait oil industry.

Core Sample Analysis:

As wire-line logging process does not mea-

sure direct and absolute rock properties

but depends on interpretation of nature of

rock character to predict rock physical pa-

rameters, the need for direct measurements

of rock properties is raised to calibrate log

measurements. This is being achieved now

by collecting either a full diameter core or

side wall core plugs from the reservoir rock.

These rock samples are sent to Kuwait Insti-

tute for Scientific Research or any other spe-

cialized contractors working in Kuwait for

different and detailed type of measurements

to identify the absolute rock properties of

the reservoir which facilitates development

and production process.

This type of study is considered one of the

latest technologies used to get more knowl-

edge about the reservoir and detailed study

thereof through incorporating all informa-

tion made available from seismic and wire

line well log measurements and analysis of

core samples. They assist to build a com-

prehensive structure model to interpret and

evaluate the reservoir internal structure lead-

ing to distribution and classification of infor-

mation within it in 3D vision.



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2- Development of Oil Production Reser-

voirs:

The primary objective of reservoir engineer-

ing is to cost effectively optimize the hydro-

carbon recovery through efficient strategic

planning and reservoir management.

The Company therefore, has undertaken a

long-term study of the condition and behav-

ior of the oil reservoirs.

These studies have become more complicat-

ed with time. The utilization of new tech-

nologies and industry modern techniques is

very essential in order to efficiently construct

development plans and production strategy.

The studies identify the point of force and

the attributes of a reservoir that control the

flow of liquids and gases within the reservoir

rock and into production wells.

Reservoir Definition:

Reservoir is a subsurface layer having suffi-

cient porosity and permeability to store and

transmit economic quantities of hydrocarbon

fluids. Oil, gas and water contained in this

layer are usually sealed by a relatively imper-

meable formation through which hydrocar-

bons will not flow. Reservoir rock could be

either sandstone or carbonates.

Areas contribute to enhance Reservoir De-

velopment:

1- Reservoir rock type (sandstone or carbon-

ate) and its properties (porosity and perme-

ability).2- Fluid properties (viscosity, associated gas,

API density…).

3- Reservoir geological model showing rock

and properties distribution.

4- Production mechanism (solution gas drive,

gas cap drive, water drive).

5- Tracking water encroachment.

6- Reservoir simulation models.

Modern Studies in production Develop-

ment:

In general, the abovementioned studies are

applied to different fields in Kuwait such as

the Greater Burgan Field, which contains

the largest Sandstone reservoir in the world.

In order to manage such reservoir, state of

the art technology needs to be utilized in

the Company’s researches and studies. Thefollowing are some of the major studies

conducted in the area of reservoir develop-

ment:

1- Post-Blowout status of the reservoir.

2- Geological and simulation models.

3- Water encroachment studies.

4- Reserves evaluation studies.

5- Production history and predicted reser-

voirs behavior.



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6- Evaluating different production scenarios

and determining the feasibility of each sce-

nario.

7- Analyzing 2D and 3D seismic studies.

These studies were carried out for the fol-

lowing fields in Kuwait:

3- Petroleum Engineering:

Petroleum Engineering is the backbone to all

oilfield operations. Hydrocarbon reservoirs

need wells to be completed and produced in

an appropriate manner to get the best out

of this Mother nature’s treasure. Petroleum

engineering usually associated with comple-

tion, monitoring, evaluation and optimiza-

tion of well performance. With increasing

complexity of reservoirs and the need to

enhance production through secondary and

tertiary enhanced recovery process, artificial

lift etc., the role of petroleum engineers is

becoming ever important to ensure desired

results.

Some major petroleum engineering areas

that are efficiently being dealt with in KOC

ReservoirsFields

BurganWaraMarratMinagish

Greater Burgan Field

Marrat

MinagishUmm Gudair Field

East Minagish

MarratMinagish Field

ZubairDown

BurganUpperBurgan

MaudoudRaudhatain

Field

DownBurgan

UpperBurgan

MaudoudSabriyah

Field



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are outlined below:

Well planning, design and equipment selec-

tion:

Each well is planned to meet specified re-

quirements and completion designed to

meet required rate conditions. Appropriate

completion equipment is thus selected keep-

ing in view HSE compliance.

Well Engineering:

Tubing stress calculations are done for each

well and appropriate completion equipment

is selected to ensure well integrity.

Injection well monitoring and use of perfor-

mance improvement techniques.

Injection well rates & quality are constantly

monitored and evaluated. Acid stimulation

and flow back techniques are being utilized

to improve well performance where appro-

priate.

Balance injection and off-take rates for wa-

ter flood management:

Production and injection rates for each wa-

terflood pattern are assessed and adjusted to

maintain optimum sweep.

Inhibition of asphaltene/scale/bacterial,

etc. deposition:

Asphaltene deposition is a problem in some

of our oil fields. Many studies have been

conducted to identify the causes of the

problem and to devise remedial measures.

Chemical squeezes are currently being tried

to control/mitigate this problem. Also with

onset of water cut in wells scale deposition is

a potential problem and measures are avail-

able to deal with this through appropriate

chemical squeeze treatments.

Corrosion monitoring and control:

Full scale corrosion monitoring and control

processes are implemented to ensure risk

free operations.

Water production control:

Water cut is a major problem in wells pro-

ducing from natural/artificial water influx

reservoirs. Water production is reduced with

cement squeeze jobs where appropriate.



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Artificial lift design, implementation, moni-

toring and optimization:

Many type of artificial lift methods such as

electrical submersible pumps, gas lift etc. are

already designed and in use in many wells.

The performance of these lift mechanism is

being continuously evaluated.

Production well performance monitoring

and evaluation:

All producers are constantly monitored and

performance is optimized through vertical

lift performance software.

Well integrity assurance:

Each well integrity is analyzed through suit-

able logs/well performance and all remedial

measures are being taken to ensure well in-

tegrity.

Surveillance data acquisition and evalua-

tion:

Surveillance strategy based on prudent res-

ervoir management practices is formulated

and implemented to acquire required sur-

veillance data. This is key input for reservoir

management and highlighting well interven-

tion opportunities.

Well Surveillance Division:

The division consists of three sections and

major functions of each section are given

below:



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First: Contract Section:

The section is responsible for administration

of various contracts like:

1- Electrical submersible pumping lease con-

tracts.

2- Gas lift contracts.

3- Coiled tubing contracts.

4- Well testing contracts.

5- Hydrochloric acid supply contracts.

6- Preparation of Capital and Expense bud-

gets.

7- Budget control and monthly status re-

ports.

8- Processing of contractor’s invoices.

Second: Artificial Lift Operation Section:

This section is responsible for all field opera-

tions related to artificial lifts modes such as

submersible pumping and gas lift, etc. Main

functions of this section are:

1- Supervision of work/overs for installations

of ESPs and Gas lift.

2- Monitoring and trouble shooting of artifi-

cial lift installations.

3- Verifying contractors service tickets for

the services provided.4- Weekly and monthly status reports.

Third: Rigless Operations Section:

This section is responsible for all wire line

activities and rigless operations as detailed

below:

1- Follow up well measurement activities.

2- Well renovation through cleaning opera-

tions.

3- Slick line works, enlivening wells by swab-

bing, PLTs, TDTs, pressure/temperature sur-

veys and tubing corrosion logs.

4- Well productivity measurement process-

es.

5- PVT sampling, production-GOR testing

of wells.

6- Rigless perforations.

7- Well stimulation and coiled tubing jobs.

8- Increase production through changing

production layer.

9- Reduce water production.

10- Treat production deposits

11- Treat pipelines from asphaltine and lime

deposits.

12- Well depth control.

13- Lift and remove equipment and wires

dropped into the well.

14- Services tickets/invoices verification and

budget control for related jobs.

15- Preparation of monthly status reports.

16- Train and develop the Company petro-

leum engineers in addition to the students of

Faculty of Engineering & Petroleum in Ku-

wait University and PAAET.



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1- Production Operations:

Production Operations manage the process

o producing crude rom all o Kuwaiti oil

fields. The fields are connected to Gathering

Centers where gas is separated rom oil.

Oil is then pumped along to the main mani-

old in Ahmadi where the oil produced is

combined. The oil is temporarily stored in

the North and South Tank Farms, and is then

transerred and loaded in vessels at sea. The

oil is also transerred to the refineries in Mina

Al-Ahmadi, Al-Shuaiba and Mina Abdulla

and occasionally to Kuwait’s power generat-

ing stations.

The gas separated rom oil is also transerred

to gas booster stations and, rom there, to

the gas refinery station in Ahmadi. The gas,

reerred to as “rich” gas contains hydrocar-

bons and other chemicals that are later sepa-

rated at the refinery. The gas is ed back to

the distribution network as “lean” uel gas

and is then distributed to power stations and

other industries.

Production acilities include:

The Wellheads:

The Wellhead is the equipment used to con-

fine and control the flow o oil rom the well



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to Gathering Centers. The wellhead is made

up o an assembly o valves and fittings that

can control the amount o crude oil that is

produced rom the well. Wellheads are made

o a special type o metal. They are heavy

and high-pressured to support the weight o

the tubing in the well.

Pipeline and Maniolds or oil and gas:

A maniold is an accessory system o pipes

and lines that extend along an area to carry

gas, liquefied gas and crude oil to the various

acilities and installations in the Company. A

maniold is a center or a number o pipe-

lines that control the flow o oil and gas with

the ability to separate them during mainte-

nance.

Oil Gathering Centers:

Gathering Centers are installations where oil is

separated rom high and low pressure gases.

The two types o gases are then transerred

to gas booster stations. Each Gathering Cen-

ter receives oil rom a number o wells, de-

termined according to the size and produc-

tion capacity o the Center. Most Gathering

Centers accommodate 30 wells at least. Each

one o the wells is distinguished rom one

another in terms o pressure, amount o salt

ound, production method used and depth.

Gas Booster Stations:

The gas which is separated in Gathering Cen-

ters is sent to these stations, then it is com-

pressed and transmitted to the petroleum

condensation plant. Beore gas is transerred

to the refineries it passes through a water re-

moval system.

Under high and low pressure, liquefied pe-

troleum gas is produced. The gas passes



25

through the water removal plant a second

time and is transerred to refineries in Sh-

uaiba.

Water Injection:

A method o re-injecting effluent or surplus

water into the earth’s high-pressure reser-

voirs. The internal pressure o the well can

be maintained or dispose o produced waterinto reservoirs allocated or this purpose by

using this method.

Gas Injection:

A method o re-injecting surplus gas into the

earth’s high-pressure reservoirs. The internal

pressure o the well can be maintained by us-

ing this method.

Steam Injection:Similar to the method used in gas injection

and is used to maintain production.

Maniold where oil rom Gathering Centers

is combined:

Gathering Centers pipeline converge at the

main maniold. A maniold connects be-

tween the crude oil system and the oil tank

arms.

Tank Farms:A group o tanks to collect and store the

crude beore the transer to the loading a-

cilities or export. There are a total o 56

tanks, 24 in the North Tank Farm and 22 in

the South Tank Farm with a total storage ca-

pacity o about 16 million barrels.

2- Export Pipelines:

Oil is exported rom the South Tank Farm

through pipelines. It flows through a grav-



26


ity maniold connected to the South Tank

Farm.

These pipelines extended to the South Pier

and single point mooring and supply the re-

fineries and power stations.

Oil is exported rom the North Tank Farm

through our pipelines which are connected

to gravity maniolds o North Tank Farm.

Three o the pipelines extend to the North

Pier and to the SPM pump house at MinaAl-Ahmadi.

· Pump House (gravity line):

Oil is exported through use o gravity flow

lines. The pumping units located in Mina Al-

Ahmadi are used when high export flow rate

is needed.

· Crude Oil Control Room:

All operations including mixing, storing and

exporting o crude oil are controlled in this

room using sophisticated and advanced

equipment. Construction o this Center was

completed in 1994.

· Old South Pier:

It was constructed in Mina Al-Ahmadi in

1949 and it includes 7 berths in 40-49t. in

depth.

Due to old construction o this pier, a new

pier was constructed near thereto including

7 berths in 40-49 t. in depth, out o which

3 berths are equipped with acilities or load-

ing crude oil tankers. This pier includes a-

cilities or exporting gas, light distilled prod-

ucts, heavy and light uel oil and diesel oil

including shipments limited to one item only

or in shipments in which one o these prod-



27

ucts is mixed with other products. The pier

is equipped with two berths that include spe-

cial acilities or LPG.

Although ownership o this pier was trans-

erred to Kuwait National Petroleum Compa-

ny, however, marine operations are managed

by Kuwaiti Oil Company through Export and

Marine Operations Group.

· North Pier:

The North Pier was constructed in order to

accommodate the increase in oil exports. It

was commissioned in June 1959. The pier

includes our berths with 55-60t. in depth.

· Sea Island:

The increase in size and number o tank-

ers (reaching a loading capacity o 320,000

d.w.t.) prompted the idea o constructing a

two-berth sea island 10 miles offshore in 95

eet o depth.

A ceremony was held under the auspicious

o the late Sheikh Sabah Al-Salem Al-Sabah

to announce the flow o oil through the

world’s longest marine pipeline extendingto the Sea Island and loading on the VLCC

“Universe Kuwait” with a capacity in excess

o 326,000 tons (the island was destroyed

due to invasion o vanished Iraqi regime in

August 1990).

· Mooring Berths:

In 1994 to new mooring berths were built in-

stead o the sea island which was destroyed



28


by vicious invasion to Kuwait. These two

mooring berths are operated alternatively

and their export capacity is 14500 m/tons

per hour.

· Single Point Mooring:

The SPM is a loading acility. Carriers are se-

cured by means o a single rope tied to the

ront o the ship. Floating hoses are placed

along the side o the ship while it rotates

reely around the SPM. The exporting ca-

pacity rom this acility is about 7,500 ton/h

by gravity lines and 12,500 ton/h by pump-

ing.

· New Production Operation Projects:

Upgrading Gathering Centers and gas boost

stations through mega projects whereby oiland gas flow pipelines are changed and lited

as well as increasing their oil capacity by pro-

viding them with new equipment such as iso-

lation units, dewatering and desalting units,

pumps and liquefied gas intensification units.

· Export operations Projects:

- Project or upgrading export acilities includ-

ing construction o 19 tanks with operating

capacity o 11,500 million barrels and add-

ing 5 gravity 48” dia. pipelines and setting

up post pumps, modern gauges and two new

mooring berths.

- Increase export capacity through construct-

ing 8 additional tanks with operating capacity

o 5 million barrels.

- Replace filling pipelines or south and north

tanks and replacing central mixing maniold.

- There are projects under study to accom-

modate uture increase in production as per2020 strategy or attaining production rate o

4 million barrels per day.



29

Health, Saety and Environment Group moni-

tors and directs the Company’s perormance

or applying HSE schemes and projects through

the adoption o many sensitive programs, in-

cluding:

· Project or limiting emission o gas contami-nants associated with production as the most

import source o air pollution in most oil pro-

duction operation is the flaring o associated

gas and its effect on the surrounding residential

areas according to weather conditions at the

time o emission and spread. Reducing these

pollutants is considered as one o the most

important environmental achievements in the

Company’s activities that started a short time

ago, owing to their negative impact on the

Company’s environmental health reputation

locally, regionally and internationally on one

hand and on the credibility o perormance in

programs made within the Company’s strategic

plans at a healthy environment clear o pollut-ants and diseases on the other hand.

· The project o monitoring the quality o ambi-

ent air in oil operations area and identiying all

sources causing air pollution resulting in emis-

sion o air contaminants, then, finding the best

solutions to put a limit to this problem which

is harmul to the health o employees, society

and environment.

· Improving the quality o effluent water as-



30


sociated with exploration and production op-erations with view o injecting such water into

underground ater processing and clearing it

o the associated oil within the expansion and

development programs in oil production opera-

tions.

· The Company is seeking to establish an optimal

HSE program, through technology transer pro-

grams and contracts with world major oil firms

to identiy the measure and methods special or

realizing that program. Kuwait Oil Company isparticipating in organizing HSE seminar or oil

sectors in the Middle East in cooperation with

each o Exploration & Production Forum and

International Petroleum Engineers Association.

· The Company carried out a pioneering ex-

periment in waste recycling through actual par-

ticipation by Ahmadi inhabitants or separating

household wastes and redirecting the same to

proper locations.

· The Company enclosed operations area witha security ence or protecting it, thus adding a

new block to the project o land greenery and

expanding the area o reserves which play a

noticeable positive role in:

- Reducing the sand advancement phenom-

enon. This urther helps expand the beautiul

green plant area and contributes to promoting

the biological diversification in the area.

· Among the vital projects, there is the annual

gardening competition which encourages soci-ety to contribute to developing the agriculture

and expanding the greenery in Ahmadi city.

This had a remarkable effect in landscaping the

area and developing it environmentally.

· Under its strategic plan, the Company devel-

oped a public project represented in project or

keeping all gaseous, liquid and solid emissions

and urther all chemical waste in an accurate

database or benefiting rom them in decision-



31

making and acilitating the perormance in ap-

plying HSE scheme.

· The Company is currently entering all file rules

in the Geographical Inormation System (GIS)

or acilitating the process o dealing with diver-

sified and various inormation with the aim o

developing, improving and speeding up its use

in service o inormation management and im-

plementation in a proper way in due time at the

least cost. The system will serve as a specializeddata-bank that provides the inormation to all

Company employees. This will positively help in

management o oil exploration and production

operations within the ramework o HSE policy.

· Water injection project at Wara Field-Ratawi

Reservoir has been commissioned in ull or com-

pletely disposing large quantities o effluent wa-

ter through pumping it in wells instated o drain-

ing it in water gathering pools in the desert.

· Coordination with the Public Authority or In-

dustry and the National Cleaning Company or

transporting inactive and dangerous waste rom

the Company’s operations acilities to Shuaiba

Waste Plant according to Cabinet’s Resolution

No. 1002 dated 20/12/1998.

· The Company has adopted HSE Benchmark-

ing pioneering project within its strategic plan.

This enhances its status and places it in the ore-

ront o the region states in the field o HSE. The project aims at comparing the Company’s

perormance at all levels with that o similar

oil companies in the GCC countries or giving

prominence to distinctive points and adjusting

the standard o perormance through imple-

menting Gap Analysis in applications o HSE

management program wherever development

and change are needed in comparison with ad-

vanced international measures and systems as



32


regards HSE program.· Project or identiying the measures and regu-

lations or assessing the health environmental

hazards o projects presented by financers or

preserving the health and saety o the at-

mosphere o work environment and its sur-

roundings.

· For limiting smoking phenomenon at work

sites in order to reduce the direct effects on the

health o smokers and indirect effects o pas-

sive smoking within a special awareness pro-gram or activating the law which undoubtedly

helps achieve the goal.

· In addition, the Company participate in na-

tional plan or combating oil pollution in marine

environment which was represented as distinct

emergency plan or combating oil contamina-

tion in territorial waters which made it the lead-

ing local and regional company in this field.

· Implement a program or removal o all sourc-

es o asbestos used or a long time over many

years in the Company and its houses. This pro-

gram is within a deliberate plan that ensures all

means o saety and health during the removal

and disposal these wastes.

· The Company is devising a clear-cut program

or measuring and assessing the environmental

output o the projects it will carry out within the

implementation o its independent or joint de-

velopment plans. The Company is conducting

environmental output studies o construction

and industrial projects in coordination with the

Environment Public Authority under Law No.

9/90.

· Project or monitoring the quality o under-

ground water located beneath the pools used

or gathering effluent water associated with

production operations. This water is oten

mixed with varied quantities o crude oil.

· Continuing the process o clearing the Com-

pany fields o ordnance and explosives.· Cooperation with KISR in the program o re-

mediation o the soil oil lake polluted and build-

ing the treated soil park in Ahmadi town.

· Participation in various HSE activities, exhibi-

tions and workshops and local, regional and in-

ternational conerences.



33

· To keep up with today: World developmentsand changes and entering gas era, Kuwait OilCompany adopted the concept o being a lead-er in penetrating this industry in order to keeppace with challenges and new conditions tak-ing place in oil and gas sectors worldwide, Gulregion and Arab world.· From this point, Gas Management was cre-

ated in July 2004 under Circular No. 19/2004.· Kuwait Oil Company did not hesitate in join-ing advanced countries and breaking into gasera in the course o utilizing this natural ortunein addition to shortage in gas quantity aced byState o Kuwait and hence there is a pressingneed or increasing such quantities, in particularuel gas in order to operate electricity powerstations and dispense with combusting heavyuel due to air pollution resulting rom this pro-cess. Thereore, to protect environment, there

is no solution but using gas because it is very

clean upon combustion and ree rom contami-nation.· Kuwait Oil Company, under its strategy, islooking orward to achieving high quality pro-duction o gas in the required quantities in lieuo importing gas rom neighboring countries tofill up the shortage. In this regard, Kuwait Pe-troleum Corporation, in conjunction with Ku-

wait Oil Company, works on developing plansand strategies or exploring ree gas to be sepa-rate rom associated gas in oil production.· Kuwait Oil Company adopts the concept andgoal set or reaching 1% in gas flaring due tovery significant environmental and economicalreturn in addition to the benefit o energy sav-ings and all o these have positive reflections onKuwaiti economy.· Keep ambitions and ideas aim at attainingsound clean environment using best practices

and methods in gas flaring processes. I natu-



34


ral gas becomes available in State o Kuwait, itwill provide the opportunity to transmit gas tohouses through various distribution networksollowing the example o advanced countries inaddition to using such gas in various industrialsectors in order to maintain clean environmentree rom pollution.· Security and saety processes are the top pri-

orities in relation to dealing with highly hazard-ous materials. In this regard, an action planwas developed to maintain security and saetyo personnel and acilities; get knowledge ogas hazards and different methods or dealingwith it and staff’s good knowledge o ideal op-erations to avoid sudden shutdown events andwork-related accidents.· Kuwait Oil Company strives and plans or pro-viding and preparing technical caders requiredor keeping up with rapid development in gas

industry and ollow up in addition to supervising

huge projects approved by top management.Accordingly, a comprehensive training plan wasdesigned or staff o Gas Management Groupwhere technical cadres began to participate inpreparing work papers and workshops in inter-national organizations in addition to providingengineers and personnel with special experi-ence through contribution by global companies

and international organizations specialized inreducing flaring rates, increasing productionand improving its quality.· Gas Management Group aims on the shortterm to attain ull development in terms o pro-duction, operations, transport and marketinggas to cover entire needs or energy in State oKuwait.



35

The Company’s role and interest are obvious in

qualiying national manpower since it opened

the first center or technical training Magwa in

1951. A large number o Kuwaitis began train-

ing at this center and were acknowledged as the

first cratsmen in Kuwait.

Training and development continued through

opening in 1960 a training center equipped with

the latest acilities and workshops.

In the mid-sixties and seventies, the Companypresented many training, services, secretariat

and administration program to qualiy the Ku-

waiti youth or running oil production, exporting

and refining operations.

At present, the Company is greatly interested

in qualiying and developing the employees at

all levels to upgrade their efficiency and prepare

them or managing the company operations

proficiently. To achieve this, the Career Devel-

opment Department prepares the plans or iden-

tiying the training needs through the most up-

to-date international methods, devises training

policies and implements them by using all avail-

able channels, e.g. preparing and implementing

technical programs, managerial, secretariat and

English language program in cooperation with

KPC, all consultancy houses and institutions and

Kuwait University. It also sends the employees

abroad or courses, programs, conerences and

work with international oil companies or acquir-ing urther advanced expertise. Training and

development targets concentrate on preparing

and qualiying new recruits, including university

graduates and diploma holders, through special-

ized programs in line with the requirements and

goals o the Company’s strategic plan.

The Company does not neglect its national role

in training through giving opportunities o field

training to college, institute and university stu-

dents within its various operations.



36


General Objectives:· The Company gives significant interest to hu-

man capital due to its important and effective

role in achieving strategic objectives and optimal

utilization o human resources through provision

o training and development opportunities.

· Job Training & Development Group endeavors

to support 2020 strategy to achieve the Com-

pany uture objectives.

· Transer working environment in the Company

to a learning environment to motivate personneland urge them or continuous sel-development

through in-house programs and online learning

programs provided by the Company to its staff.

· Enhance organization and perormance level in

developing awareness, qualiying and develop-

ment programs to personnel with high quality.

· Work on providing the Company key unction-

aries with most significant administration and

leadership skills through holding development

programs by many international experts special-ized in management and leadership.

· Continuous upgrade o training and develop-

ment programs or the Company personnel inline with pace o oil industry development world-

wide and give them the opportunity or train-

ing and promotion o their capabilities to match

those o international companies’ personnel.

· Strategic thought or concepts related to train-

ing and development was updated to keep pace

with the Company 2020 strategy as well as hu-

man development plans associated therewith

which ocuses on capitalization on national man-

power as a primary source or accelerating de-

velopment in all other activities and programs.

Strategic Objectives:

· Design Strategic Objectives or training and

development based on requirements o earning

phase in line with the Company 2020 strategy.

· Support and promote Kuwaitization plans

through development o national manpower ac-

cording to international standards.· Facilitate technology transmission through co-ordination with international companies.



37

In 1947 the Company relied on medical servicesrom Kuwait City. In July 1948, the Companyestablished a hospital due to the expansion othe Burgan Field. It held 130 beds and employeda large number o doctors, nurses and other per-sonnel, and provided services to the Company

or over 12 years. Medical care was provided pa-tients at the Ahmadi clinic 24 hours a day. Othersmaller clinics were established in Ahmadi, Shu-waikh, Wara, Mina Al-Ahmadi and Raudhatain.At that time patient care was concentrated atAhmadi Clinic where medical services were pro-vided around the clock. On 27th o April 1960,Ahmadi Hospital was opened to provide medicaland treatment services or the company person-nel ollowing issuance o Amiri Decree or estab-lishing Kuwait Petroleum Corporation in January

1980, it was decided to expand medical servicesprovided by Ahmadi hospital to cover all per-sonnel o the Corporation and its subsidiaries aswell as staff amilies. Thereore, Ahmadi hospi-tal is the main institution responsible or provid-ing comprehensive medical services or oil sector

employees. Moreover specialist physicians wererecruited to work in various medical fields. Inaddition, the hospital could attract specializedefficient Kuwaiti cadres to work in medicine fieldincluding:- Medical records- Health inormation system management- Diagnostic scans- Medical labs industry The hospital works on provision o best medi-cal services in terms o sufficient experiences



38


and advanced medical equipments through sev-eral departments including emergency, generalmedicine, internal medicine, protective medicine,

surgery, Obs & Gyn, ophthalmology, ENT, den-tistry, radiology, anesthesia, intensive care unit,physical therapy, laboratory, catering and ambu-lance services. There are also consultancy clinicsoperated by specialists seconded by Ministry oHealth, Faculty o Medicine in the State o Ku-wait to provide emergency and normal medicalservices or the Corporation staff.In general, the hospital services are categorizedinto our types, i.e. diagnosis services, treat-ment services, protective services and

cultivating services. These our ser-vice categories constitute the hospitalstrategy. The hospital also plays a prominentawareness role through delivery o lec-tures and holding medical conerencesthat benefit the community. In addi-tion, the hospital issues many medi-cal awareness manuals and brochuresand distribute the same to patientsand clients as the hospital manage-

ment believes in importance o nursing

proession as a humane proession in the firstplace, the company holds an annual celebrationor Internal Nursing Day besides celebration or

diabetes day and other diseases. Several institu-tions related to medicine proession participatein this occasion to provide guidelines and advicethrough lectures and responding to enquirieswhich held patients to ollow the right treatmentsystem and overcome illness difficulties. The hospital keeps up with the latest interna-tional medical developments on a continuousbasis in order to promote its desired medical rolein all specializations.



39

Kuwait Oil Company Main Office




Information Team

Public Relations & Information Group

2008

progress and prosperity-english

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