The overseas division of Kuwait’s national oil and gas company has announced it is seeking to sell all of its assets in Norway as part of a shift in strategy. Kuwait Foreign Petroleum Exploration Company (KUFPEC), a subsidiary of the Kuwait Petroleum Company, will instead focus on new production hubs and areas of exploration, according to Reuters. This could include the SK-410B drilling block in Malaysia where the company recently made its largest-ever hydrocarbon discovery.
The sale will be managed by Scotiabank, which in 2022 served as the financial advisor for TotalEnergies’ sale of stakes in 16 of its Nigerian oil projects.
Reuters reported that KUFPEC will seek a sale in the region of $300m. Earlier in 2023, KUFPEC finalised the sale of its 10% stake in Yme, a Norwegian oil field operated by Spanish company Repsol, for $68m.
KUFPEC’s Norwegian projects include a 30% stake in the Gina Krog oil and gas field, which produced an average of 9,736 barrels of oil equivalent per day (boed) in 2020 according to KUFPEC’s 2020 annual report. This was a 6,122 barrel average decrease from the previous year.
Offshore Technology‘s parent company GlobalData estimates the entirety of KUFPEC’s Norwegian portfolio produced more than 15,350boed in 2020. This was a large drop-off from 2019, wherein Gina Krog alone averaged 15,858boed. In 2021, the boed average of all of KUFPEC’s projects that had run for longer than a year fell further by a combined average of 1,108 barrels per day.
KUFPEC’s strategic shift may be fuelled at least in part by the improving natural gas outlook in other regions that the company is already active in. In 2021, the largest hydrocarbon discovery in KUFPEC’s history was a gas discovery in Malaysia at the company’s SK-410B drilling block.
The joint venture between KUFPEC and Petronas, Malaysia’s state oil and gas company, found more than 600m of net gas pay after 4,320m of drilling (‘pay‘ denotes the portion of a reservoir that contains economically recoverable hydrocarbons). A test of the well showed that the find has a flow rate of 50 million cubic feet of gas able to be extracted per day. This is also the largest gas discovery in Malaysian history.