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KUWAIT OIL COMPANY13th of February 2012

Image

Contents

• Recent Challenges & Achievements

• Strategic Gas Objective

• Gas Flaring History

• Gas Flaring in Perspective

• Flaring Reduction Projects in action

• Soft Flaring Reduction skills

• Mindset shift

• Challenging gas flaring targets

Lights & Flares 1993

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• Challenging gas flaring targets

• Flaring Reduction Projects/Initiatives

• South & East Kuwait

• West Kuwait

• North Kuwait

• Conclusion

Recent Challenges There have been three major operational challenges in the recent

years:

Facilities oil production capacity limitation

Increased water cut resulting into huge water quantities disposed in

effluent water pits which has a negative environmental impact

High gas flaring which has both environmental as well as economical

impact besides affecting the KOC Image

AchievementsAchievements In October 2010 Kuwait successfully carried out a capacity test production

of 3 Million barrels of oil per day.

KOC invested heavily and achieved 97% of produced water being

disposed/injected in an environmentally friendly method.

Gas Flaring percentage has been on a reduction trend since 2005/2006

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Strategic Gas Objective

Realizing the potential of gas

• Optimize the production and utilization ofassociated gas and maximize production ofnon-associated gas in support of the energyrequirements for the State of Kuwait, itsenvironmental objectives and the creation of

17.18%17.18%

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environmental objectives and the creation ofvalue.

1.75%1.75%

2010-11

< 1.0%< 1.0%

2012-132005-06

KOC had always a dream of reaching<1% gas flaring. This dream is now

within reach

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1.14%1.14%

2011-12

Gas Flares of the World (2003)

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Gas Flaring Trend Reduction(Based on Satellite Image Processing of GGFR)

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Kuwait leads by example in gas flaring reduction efforts in the region. Even beyond 2008, Kuwaitis still enjoying a decreasing gas flaring volumes while the produced gas is ever increasing

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Less Flaring Means Clear Skies

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What Kuwait Airways used to complain about upon descending to the runway

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Gas Flaring History

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What Does It Mean?

150

200

250

300267

151

119

# of Wembley Stadium fields with 1 foot thick carbon Layer

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0

50

100

150

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

119

6643

3111

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Year wise Improvements compared to 2005-2006?

30%

40%

50%

60%

70%

80%

90%

100%100%

57%

45%

25%

Percentage of gas flared

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0%

10%

20%

30%25%16%

12%4%

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Power to the People?

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40,392 houses have been powered over 6 years sincethe start of the flaring reduction program

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Capital Investment1. Gas flaring reduction projects:

a. Gas & Condensate Telemetry (vigilant control/monitoring)

b. 11 New CRU’s in S&EK & new 3rd train at GC-28

c. Gas Sweetening Facility (GSF)

d. New 40” Gas Export Line from NK

e. Slug Catchers for WK Lines (GMW-3 & GMW-4)

f. Selective Oil Production / LP Gas Network upgrade

g. NK Associate gas strategy

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g. NK Associate gas strategy

2. On Track Gas flaring reduction projects:

a. New BS-160 / 171 & 132

b. New Infrastructure gas networks

c. Quick wins, spillovers and crossovers

d. Gas compression and gas re-injection facilities in WK

e. New Gas and Export Pipelines

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KOC Leadership and Staff Commitment

1. Flaring in KOC is tracked on a daily basis by themanagement at all levels

2. Many corporate flare reduction campaigns wereorganized

3. Enhance Reliability of existing facilities

4. Leadership Committee monthly update on gas

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4. Leadership Committee monthly update on gasflaring and gas flaring related projects

5. Frequent coordination meetings across the K-Companies

6. Regular meetings with the major consumers

7. It is part of our KPI’s (a daily job)

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Mindset shift

1. Environmentally more sensitive

2. Monetize gas flaring

3. Enhance Corporate Image

4. Prestige KOC C&MD HSE award and Significant Achievements Award

5. Gas Flaring Reduction Campaigns at all levels

6. Present papers in local and international conferences

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Mindset shift

× Obsolete mindset: Production, Production, Production.

New Mindset: Production, Flaring, Safety, Environment,Costumers needs, costumers limitations

We can reduce flaring by talking with each others

Small ideas/initiatives in the right place at the right time

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Small ideas/initiatives in the right place at the right timecan go far in terms of gas flaring reduction

Integration between facilities

Look at the other side of the fence (GMW-4)

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Challenging The Gas Flaring Targets

The gas flaring target of less than 1% is beingchallenged, we aim to reduce further to theTechnical/economical Limit

• Special task force is initiated to study the TechnicalLimit and accordingly develop new action plans forthe new limits.

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the new limits.

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South & East Kuwait Projects/Initiatives

Project Title Turn-Over Date

EF/1769 3 New TVCs in GC-7, 8 & 21 Jul-12

EF/1738New 40” HP Export Gas Pipeline from M/F-GCMB to LPG Plant(MAA-02)

2 years from award

EF/1740 New Condensate 20" pipeline from GCMB Manifold to MAA-02 Sep-13

EF/1655 New Booster Station BS-160 in SEK Feb-12

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EF/1655 New Booster Station BS-160 in SEK Feb-12

EF/1850 Improvements to Existing Booster Stations BS-140 & BS-150 Jun-13

Initiatives

1. Synchronization of facilities shutdowns including other K-companies

2. Selective production areas to avoid flaring

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West Kuwait Projects/Initiatives

Project Title Turn-Over Date

EF/1718 New Booster Station BS - 171 in WK May-13

ContractNo. 36016

GCP for GC-16 & Gas Re-Injection Project Jan-12

EF/1746BNew 24" Export Gas & 14" Condensate pipelines from BS-171 toAGRP-MAA

2 years from award

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AGRP-MAA

Initiatives

1. WK Gas Utilization Committee

2. Shutdown production if required to avoid flaring

3. Gas Sweetening Facility

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North Kuwait Projects/Initiatives

Project Title Turn-Over Date

EF/1719

New Booster Station BS – 132,

Enhancement of BS 131 (NK) &

3 New TVCs in GC-15, 23 & 25

Jun-13

EF/1701New 40“ Strategic Gas Line from BS-131 (NK) to LPG Plant(MAA)

Commissioned

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(MAA)

Initiatives

1. NK Associated Gas Management Strategy

2. Enhance Reliability/Availability programs

3. Increase flexibility through routing excess gas to S&EK

4. Optimize Gas Lift operation

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The Global Gas Flaring Reduction

Why Join GGFR?

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Kuwait has joined the GGFR in August 2011

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Why Join GGFR?GGFR partners have established a collaborative GlobalStandard for gas flaring reduction. This Global Standardprovides a framework for governments, companies, andother key stakeholders to consult with each other, takecollaborative actions, expand project boundaries, andreduce barriers to associated gas utilization.

Conclusion

1. Flaring Reduction is driven by our concern for the environment.It is economically viable and enhance the Kuwait’s image

2. Gas Flaring Reduction can be achieved not only by hardwarebut also through soft tools

3. A mindset shift results in a shift in gas flaring

4. The flaring targets are being challenged

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5. Assets/Groups/Teams/downstreams and Sub teams worktogether for one aim of reducing gas flaring

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Thank you

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