Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation

1
Kuwait Oil CompanyA Subsidiary of Kuwait
Petroleum Corporation
Doing Business with Kuwait Oil Company LAGCOE
- 2009
Lafayette, Louisiana

• www.kockw.com

2
Agenda

• KOC Strategy
• Drilling Activities
• KOCs Portfolio of Major Projects for Intl.
  Contractors
• Business Opportunities

• www.kockw.com

3
KOC Strategy

• www.kockw.com

4
KPC Companies

• www.kockw.com

5
Mission

• To explore, develop and produce to marketable
  quality the hydrocarbon resources in the State of
  Kuwait.
• To safeguard our people and the environment.
• To conduct our business in accordance with
  government policy, good reservoir management
  practice and by using the most efficient and
  economic means available.

• www.kockw.com

6
Vision

• Achieve a leading global position in Upstream Oil
  Gas as an integrated, value- driven enterprise,
  by
• Maximizing the strategic value from oil
• Realizing the potential of gas
• Growing reserves for a sustainable future
• Being an employer of choice
• Realizing value from technology
• Strengthening our commitment to HSSE
• Striving for excellence in performance, and
• Contributing to the Enterprise and State.

• www.kockw.com

7
Key Feature of our Strategy

• Achieve the following production targets
• 3.0 MMBOPD by 2010
• 3.5 MMBOPD by 2015
• 4.0 MMBOPD by 2020 and maintain it until 2030
• Develop Heavy Oil
• Produce 600 MMSCFPD of free gas by 2010/2011 and
  increase to 1,000 MMSCFPD by 2015
• Pursue aggressive exploration program including
  the offshore.

• www.kockw.com

8
Challenges

• Developing high pressure high temperature complex
  gas reservoirs
• Develop heavy oil to reach 450 MBOPD by 2030
• Skilled and Experienced Manpower
• Water Management
• Technology
• Environmental issues

9
2 - Drilling Activities

• www.kockw.com

10

• www.kockw.com

11
924
884
764
668
589
266
128
87

• www.kockw.com

12
12

• www.kockw.com

13

• www.kockw.com

14
14
15
3 - KOCs Portfolio of Major Projects for Intl.
Contractors

• www.kockw.com

16
Major Infrastructure Projects (coming 2 years)
The projects are classified as 1. Pipeline
projects (3 Nos.) 2. Gas projects (2
Nos.) 2. Injection projects (3 Nos.) 3.
Safety Instrumentations (4 Nos.) 4.
Electrical projects (3 Nos.)

• www.kockw.com

17
FUTURE PROJECTS (Contd.)
Pipeline Projects (1/2)

• www.kockw.com

18
FUTURE PROJECTS (Contd.)
Pipeline Projects (2/2)

• www.kockw.com

19
FUTURE PROJECTS (Contd.)
Gas Projects (1/2)

• www.kockw.com

20
FUTURE PROJECTS (Contd.)
Gas Projects (2/2)

• www.kockw.com

21
FUTURE PROJECTS (Contd.)
Injection Projects (1/3)

• www.kockw.com

22
FUTURE PROJECTS (Contd.)
Injection Projects (2/3)

• www.kockw.com

23
FUTURE PROJECTS (Contd.)
Injection Projects (3/3)

• www.kockw.com

24
FUTURE PROJECTS (Contd.)
Safety Instrumentation Projects (1/2)

• Installing Surveillance Systems, Access Control
  Systems and Intruder Detection Systems at (96)
  sites that includes Gathering Centers, Booster
  Stations and other facilities of the Company
  distributed across the Kuwait oil fields and can
  be considered a scheme of National scale. The
  integrated security system will provide
  monitoring and control functionality at (4)
  Regional Asset Security Centers and a Central KOC
  Security Center which shall be built as part of
  this project. The scope of work will include
  design, supply, installation, configuration and
  commissioning of a 1300KM Fiber Network that
  shall provide connectivity to over 2500 cameras,
  security management systems, alarm monitoring
  stations and access control systems.

EF/1700

• Integrated Security system in all KOC Facilities
• Tender issue Jul-09

• www.kockw.com

25
FUTURE PROJECTS (Contd.)
Electrical Projects (1/2)

• www.kockw.com

26
FUTURE PROJECTS (Contd.)
Electrical Projects (2/2)

• The main objective of this project is the safe
  operation of the oil facilities demonstrated in
  reconstruction of a number of existing
  substations and control rooms in a way that would
  provide the necessary safety for personnel and
  equipment. This objective will be accomplished by
  the following
• 1 Construct two story elevated, blast proof
  control rooms, and maintenance offices for 9
  company oil/gas facilities (7GC's 1,3,6,7,8,20
  21 2 Boosters stations). 2 Construct safe,
  elevated, centralized electrical Substations /
  switch rooms with advanced equipments at 19
  locations through out SEK fields (14 Nos. SEK
  GC's and Booster Station 140 and 150, NTF,STF
  M52). 3 Power Distribution SCADA for SEK field
  including SCADA control room.

EF/1600

• Enhancement to Substations and Control Rooms at
  SEK GCs, BSs, NTF STF and Replacement of M52
  Substation at MAA
• Tender issue Apr-11

• www.kockw.com

27
4 - Business Opportunities

• www.kockw.com

28
Current Opportunities

• KOC is responsible of major upstream operations
  in Kuwait.
• KOC runs and maintains Ahmadi City.
• KOC owns and manages Ahmadi Hospital (Southwell)
• Current Live contracts exceed 600 valued over
  20 Billion US
• Current tenders exceed 250 Nos. valued over 15
  Billion US under different stages of bidding
• KOC total staffing of 6,000 employees.
• Works and Services are entirely outsourced.
• KOC relies on reputable contractors and vendors
  to support its activities, objectives and long
  term strategies

• www.kockw.com

29
Vendors/ Manufacturers

• Selection of proven / reputed manufacturers
• Products meeting specification, quality and
  delivery schedules.
• Approved Vendors benefit from Direct / Indirect
  Procurement opportunities

• www.kockw.com

30
Approved Categories

• No. of Main Categories (125)
• No. of Sub Categories (112)
• Total No. of Approved Manufacturers (1606)
• No. of Countries (48)
• No. of Approved USA Manufacturers (237)

• www.kockw.com

31
Minimum Requirements for Vendors

• Minimum Requirements
• Prequalification limited to manufacturers (not
  assembler/ system integrator)
• Minimum 5 years of proven experience.
• Own design, manufacturing testing capabilities
• Accreditations such as ISO/ ASME/ API/ HSE/ NB
  Type Test Report from Internationally recognized
  testing agencies like KEMA / BSI etc.
• Past experience with IOCs / ISPs for last 5
  years.
• Audited Financial Statements for 2 yrs in
  accordance with IFRS

• www.kockw.com

32
PQ of Contractors, SPs Consultants

• KOC implements OPEN ONGOING prequalification
• Quarterly monitoring of companies performance.
• Annual verification of financial capabilities of
  approved companies
• Poor performance of companies entail Q-listing.
• Pre Qualification Types
• PQ for existing categories of Works/ Services
• PQ for Specific Projects (on case to case basis)
• PQ for Companies Offering New Technologies

• www.kockw.com

33
Categories for Intl. Companies

• Major EPC Contracts (gt US 500 million)
• Large EPC Contracts (US 200-500 million)
• Medium EPC Contracts (US 50-200 million)
• Small EPC Contracts (lt US 50 million)
• Construction of Mega Tanks
• Offshore Support Services
• Onshore Oil and Gas Pipeline Projects
• General Specialized Inspection Services
• Surface Well Testing
• Offshore Drilling Rig Services
• Shallow, Medium and Deep Drilling Services
• Full Maintenance Services of Production Facilities

• www.kockw.com

34
Categories for Intl. Companies (contd.)

• Maintenance of Fire Fighting Systems
• Slick Line Services
• Dredging Works
• Marine Operations Services
• HSE Consultancy Services
• Tubular Inspection Internal Corrosion Services
• Mud (Products, Engineering Logging) Services
• Rock Properties Fluid Analysis Services
• ESP, Ultrasonic ILI Repair of Sub-sea Pipelines
• Integrated Security Systems

• www.kockw.com

35
e-Tendering Portal www.kockw.com

• Establishment of KOC e-Tendering with support of
  Microsoft
• Register and update profile online
• View KOC Tenders and categories of works
• Download Tenders and PQ Documents
• Access to commercial documents
• Security and Confidentiality
• The Company encourages companies to get to know
  KOC and participate in its upcoming Tenders
• KOC looks forward to international companies
  future presence and sharing of business
  opportunities in Kuwait

• www.kockw.com

36
Enhancements to Contracts Terms Conditions

• KOC carried out series of improvements with
  respect to its manner of conducting business.
• Enhancement of KOCs Lump Sum Turnkey (LSTK)
  Model Contracts for Major Projects.
• KOC witnessed increased participation of
  international EPC contractors in Companys
  tenders.
• The areas for improvement were identified jointly
  with International Contractors/ Consultants.
• The Enhanced LSTK model contract introduced in
  2006
• The feedback obtained has been extremely
  positive.
• Benefits from increased participation encouraged
  KOC to pursue wider improvements in Terms
  Conditions of Contracts.

• www.kockw.com

37
Enhancements to LSTK Contract Model

• Summary of Enhancements
• Sharing of Bidding Fees
• FEED Verification Pre/ Post Award of Contract
• Improvement to Bank Guarantees/ Bonding
  requirement.
• Enhanced Contractors Cash Flow
• Non-incorporated Joint Ventures / Consortia
• Limitation of Liability
• Clear process for Variations
• Performance/ Schedule Incentives
• Currency Commodity Price Fluctuations
• Enhanced Claims Handling
• Alternative Dispute Resolution
• General Improvements
• Re-allocation of risks to party best able to
  control that risk
• Risks allocated in line with international norms
• More user-friendly structure, terminology and
  language
• Better administration

• www.kockw.com

38
Alternative Contracting Options

• Most producers are under pressure to increase
  production.
• Many international Contractors are unwilling to
  bid for projects on a lump-sum turn-key (LSTK)
  basis.
• KOC has reacted to such market demands.
• Two (2) phases for the development of the
  following Four (4) alternative EPC Model
  Contracts
• Phase (I) Re-measurable Model Completed
• Cost Plus Model
• Phase (II) Cost Plus Convertible Model
• Cost Plus (FEED by Company)
• Early Production Facilities Model
• Two Envelope Bidding System

• www.kockw.com

39
THANK YOU

• www.kockw.com