KUWAIT

Kuwait Petroleum Corp. (KPC) was established in January 1980 as a public corporation to handle all Kuwait's petroleum industry activities.

The Ministry of Oil decided the four state oil companies, Kuwait Oil Co. (KOC), Kuwait National Petroleum Co. (KNPC), Petrochemical Industries Co. (PIC), and Kuwait Oil Tanker Corp. (KOTC) would be run most efficiently under umbrella company KPC.

Although KPC is an autonomous company, it is supervised by Minister of Oil Ali Ahmad Al-Baghli (Fig. 1). Besides the four national companies handling operations within Kuwait, KPC has major assets abroad. Upstream operations are handled mainly by Kuwait Foreign Petroleum Exploration Co. (Kufpec), based in Kuwait; downstream by Kuwait Petroleum International (KPI) in London.

The board members responsible for exploration and production, refining and LPG, petrochemical industries, and transportation are effectively the heads of KOC, KNPC, PIC, and KOTC, respectively. KPC was formed with the intention of having as few layers of management as possible, creating a direct chain of command and flexible management style.

KUWAIT OIL CO.

KOC is responsible for oil and gas exploration and production inside Kuwait and has been working to bring production capacity back to the 2 million b/d level in place before the Iraqi invasion of August 1990.

Before the invasion, KOC had 1,080 wells operating on its oil fields. Only 100 of these were undamaged. Over 80 new wells have been drilled and 350 worked over or re-drilled in the southern and western oil fields.

The Kuwait delegation to the OPEC meeting in June this year said that KOC was ready to hike production to 2.16 million bid from July 1. Oil minister Ali Al-Baghli said Kuwait would have a production capacity of 2.4 million b/d by the end of June.

OPEC's June meeting ended in a rollover of production quotas into the third quarter, with Kuwait refusing to accept an offered 10% rise on its second quarter quota of 1.6 million b/d. Al-Baghli said KOC production in July and August would be 2 million b/d, and from Sept. 1 would be raised to 2.16 million b/d.

Al-Baghli told reporters KOC would not be looking to raise output higher than 2.16 million b/d in the fourth quarter, but would be aiming to secure a quota near 2.16 million b/d at the next OPEC meeting.

KOC's crude-handling capacity in surface installations is now believed to be 2.83 million b/d, with plans in place to boost this to 3.65 million b/d by August 1996. Further projects under study would raise crude-handling capacity to 4.45 million b/d by March 1997.

Export capacity stands at around 2.88 million b/d, with 1.88 million b/d from the war-damaged North and South Piers and 1 million b/d from a single point mooring (SPM) loading point near the abandoned Sea Island export terminal. VLCC and ULCC vessels can load at the SPM but not at the piers. Two single buoy mooring loading facilities are planned for installation.

KUWAIT NATIONAL PETROLEUM CO.

KNPC is responsible for refining and marketing of petroleum products within Kuwait. The company runs three refineries, with design capacity totalling 830,000 b/d before being damaged in the Iraqi invasion: Mina al-Ahmadi had 400,000 b/d, Mina Abdullah 230,000 b/d, and Shuaiba 200,000 b/d.

Mina al-Ahmadi is now operating at about 190,000 b/d, with current repair work intended to boost this to 290,000 b/d in January 1994. Mina Abdullah is currently believed to be running at 230,000 b/d full capacity. Shuaiba is currently out of action, though due back onstream at 130,000 b/d in January 1994. However, discussions are taking place to decide whether the damaged refinery should be abandoned and replaced with new a plant.

About half of Y-NPC's 14 million bbl crude storage capacity was destroyed in the invasion, but it is believed to be on the way to full reconstruction.

PETROCHEMICAL INDUSTRIES CO.

PIC produces petrochemicals and fertilizers in Kuwait and is involved in joint ventures in China, Turkey, and Tunisia.

PIC plans to build a giant petrochemical complex at Shuaiba, near Kuwait City. Recently the company announced it was downgrading its planned capacity from 750,000 metric tons/year of ethylene output to 650,000 metric tons/year.

The ethylene plant will use ethane-rich gas produced at Mina Abdulla as feedstock. Produced ethylene will in turn be used in making 450,000 metric tons/year of high-density polyethylene and linear low-density polyethylene, and 350,000 metric tons/year of ethylene glycol.

PIC signed an agreement in June with Union Carbide Corp. to develop the $2.3 billion petrochemical complex by 1997. PIC and Union Carbide will each hold 45% of equity, with 10% in the hands of private Kuwaiti investors.

KUWAIT OIL TANKER CORP.

KOTC owns and operates 30 tankers with total tonnage of over 3 million dwt. The fleet comprises 4 crude oil carriers, 22 products tankers, and 4 LPG carriers. Four 280,000 dwt crude carriers and two 78,000 cu m LPG carriers were said to be on order, while another two crude oil tankers are expected to be ordered within the next 2 years.

KUWAIT FOREIGN PETROLEUM EXPLORATION CO.

Kuwait Foreign Petroleum Exploration Co. (Kufpec) was set up in 1981 to carry out exploration and development projects outside Kuwait. Kufpec has subsidiaries Kufpec Australia Pty. in West Perth and Kufpec (Indonesia) Ltd. in Jakarta.

In Asia, Kufpec is involved in producing Anoa field off Indonesia, Camar field off East Java, Pakistan's Kadinwari gas field, China's Yacheng gas field, and Yemen's Jannah and East Shabwa Blocks.

Australian interests include Harriet oil field.

In Africa, Kufpec is involved in the Congo's Yombo field, Egypt's Amal and Ras Kanayes fields, Algeria's El Agreb and El Harcha Blocks, and Tunisia's North and South Kairouan Blocks.

SANTA FE INTERNATIONAL HOLDINGS [CAYMAN] INC.

Santa Fe International Holdings (Cayman) Inc. provides worldwide contract drilling services along with oil and natural gas exploration and production through subsidiaries Santa Fe Mineral and Santa Fe Drilling.

Santa Fe Mineral concentrates its exploration efforts in the Gulf of Mexico and Argentina. It is involved in the Gulf's Matagorda Island 633/634 complex, High Island A-373, and Viosca Knoll 99 fields.

Santa Fe Drilling owns 25 offshore drilling rigs and 21 onshore units. The company recently had built the Galaxy I and Magellan heavy duty jack ups, which are in service in the North Sea.

KP NORTH SEA HOLDINGS

KP North Sea Holdings Ltd. is a London-based subsidiary responsible for exploration and production of gas in Northwest Europe. The company has interests in producing Thistle, Don, Osprey, and Miller fields in the U.K. sector. It also has a stake in the Alba, Britannia, and Gryphon fields, currently under development.

KUWAIT PETROLEUM INTERNATIONAL

Kuwait Petroleum International (KPI) is a London-based downstream subsidiary company established in 1983 when KPC bought Gulf Oil's downstream interests in The Netherlands, Belgium, Luxembourg, Sweden, and Denmark. KPI bought Gulf s Italian downstream business and those of Ultramar Inc. in the U.K. in 1986. In 1987, KPI bought British Petroleum Co. plc's Danish assets plus another 500 gasoline stations in the U.K.

Now KPI sells over 400,000 b/d of products through some 6,500 European gasoline stations, mostly under the Q8 brand name launched throughout Europe in 1986. KPI's European turnover is more than $4 billion/year.

KPI owns three European refineries, with combined capacity of 225,000 b/d, in Europoort, Naples, and Skaelskor, Denmark.

Now KPI has Q8 petroleum and lubricants outlets in U.K., Germany, Denmark, Italy, France, Czechoslovakia, Spain, Sweden, Hungary., Belgium, The Netherlands, Luxembourg, and Thailand.

Kuwait Oil Thailand was opened in 1990 with seven Q8 branded stations and plans to build a national network over the next few years. KPI has undertaken a feasibility study for a Thailand refinery.

In Hungary, KPI formed a joint venture with the state oil company to take over 17 service stations and build more. The joint venture is studying construction of a new refinery.

KPI also handles KPC's international aviation fuel business, operating in 22 international airports.

Kuwait Lubricants has five lube oil blending plants and claims to hold 5% of the European lubricants market.

From London, KPI coordinates the efforts of the following regional companies: Kuwait Petroleum (Benelux) BV in Rotterdam; Kuwait Petroleum (France) SA in Paris; Kuwait Petroleum Europoort BV in Rotterdam; Kuwait Petroleum Research & Technology BV, Rotterdam; Kuwait Petroleum (Danmark) AS, Virum; Kuwait Petroleum (Danmark) AS, Skaelskor; Kuwait Petroleum Italia SpA, Rome; Kuwait Raffinazione e Chimica, Naples; Roloil Sri, Milan; Kuwait Petroleum Svenska AB, Solna, Sweden; Kuwait Petroleum (Deutschland) GmbH, Ratingen, Germany; Kuwait Petroleum International Aviation Co. Ltd., Staines, U.K.; Kuwait Petroleum Lubricants Ltd., Leeds; Kuwait Oil (Thailand) Ltd, Bangkok; Kuwait AFOR Trading Ltd. Budapest; and Kuwait Petroleum Espana SA, Madrid.

OTHER KPC SUBSIDIARIES

Besides the main subsidiaries, KPC also has several smaller companies. Kuwait Aviation Fueling Co., registered in Kuwait, trades in aviation fuel. Kuwait Santa Fe Braun for Engineering & Petroleum Enterprises provides design, engineering, and related services to the petroleum industry.

Overseas ventures are: SFIC Holdings (Cayman) Inc., which carries out exploration, development, production, contract drilling, engineering, and construction; KPC Holdings (Aruba) EC, which deals with refining and marketing of refined products; Petrochemical Industries Holdings NY, which invests in other companies and performs financing activities; and Gulf Industrial Investment Co. based in Bahrain, which produces iron ore pellets.

Associate companies are Kuwait Drilling Co., a contract drilling company in which KPC has a 49% stake, and Arabian Oil Co. Ltd., a Japanese crude oil and products marketing company in which KPC holds 10%.