Kuwait hits large oil discovery

Journal Record, The (Oklahoma City), Feb 23, 1999 by Sean Evers Bloomberg News

KUWAIT CITY -- Kuwait has found new reservoirs of high-grade oil in the northwest of the country that could contain as much oil as the world's second-largest field, the country's oil minister said.

Sheikh Saud Nasser al-Sabah said in a statement massive "reserves of sulfur-free" oil had been discovered at the Kra al-Marow field.

He said the reserves could equal Kuwait's Burgan field, which has proven reserves of 70 billion barrels and has a daily output of 1.6 million barrels a day. Burgan is the world's second-biggest field after Saudi Arabia's Ghawar field. Kuwait already has about 200 billion barrels of crude reserves, or 9.3 percent of known global oil reserves. It plans to double the output capacity of five existing fields in the north of the country to 1 million barrels of oil per day by offering international oil companies a pre-determined fee for each additional barrel of oil they can produce under a contract called an "operating service agreement." Any agreements would signal a greater role for international companies, whose concessions in the country were ended by Kuwait in 1975. It is unlikely foreign oil companies would get access to the newly discovered low-sulfur, or sweet, oil reserves as the terms of the re-opening does not include new fields. Sweet oil is a light crude low in sulfur, and worth more on the open market than high-sulfur, or sour, crude because it is less expensive to process. The Kra al-Marow field will be tested over the next four to six months to evaluate its production capacity, said the Kuwait oil ministry statement. Al-Sabah did not give the exact size of the new discovery. The form of international agreements involving oil is sensitive in Kuwait, where the constitution forbids foreign ownership of natural resources.