highlights of operations
Chevron maintains an important business relationship with Kuwait.
Our operations are in the onshore Partitioned Zone (PZ), an area between Kuwait and Saudi Arabia. Joint Operations – staffed and funded equally by Saudi Arabian Chevron Inc. and the Kuwait Gulf Oil Co. – explores for and produces crude oil and natural gas in the onshore PZ. The production from these operations is shared equally between both countries.
In addition, Chevron Kuwait Limited maintains a business development and liaison office in Kuwait City as we continue to seek new ways to share our energy expertise in Kuwait.
Globally, Chevron and Kuwait are important strategic trading and investment partners. For example, Kuwait Foreign Petroleum Exploration Company is a partner in the Chevron-led natural gas project in Australia and the Duvernay shale in Canada.
exploration and production
Chevron’s long record of developing crude oil and natural gas in the Middle East dates back to our earliest discovery, in Bahrain in 1932. Kuwait’s Burgan Field, the world’s second-largest onshore oil field, was discovered in 1938 by Gulf Oil Corp., which later merged with Chevron. Following nationalization of this field by the government of Kuwait, Chevron subsidiaries continued to provide assistance to the Kuwait Oil Company via technical-service agreements through 2008.
The Chevron-led consortium competing to develop Kuwait’s northern fields ended in 2010. However, Chevron has an extensive history in the region and continues to be active in Kuwait, and we are one of two partners in the onshore PZ between Kuwait and Saudi Arabia. Saudi Arabian Chevron represents Saudi Arabia’s interest in the area, and Kuwait Gulf Oil Co. represents Kuwait’s interest.
Maximizing resources in the Partitioned Zone
Companies that later became part of Chevron have produced oil on behalf of Saudi Arabia in the onshore PZ since 1949. Chevron has an agreement with Saudi Arabia to operate the kingdom’s 50 percent interest in the hydrocarbon resources of the onshore PZ. The agreement was extended and amended in 2009; it expires in 2039.
In 2009, steam injection began at the Large-Scale Steamflood Pilot Project for the carbonate First Eocene reservoir at the Wafra Field. A carbonate reservoir is an oil or gas trap formed in reefs, dolomite and certain types of limestone. Typically, carbonate reservoirs are highly fractured and not conducive to steamflooding on a large scale. However, the carbonate Eocene reservoirs at Wafra have properties that are promising for successful steamflooding. Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, which reduces its viscosity and enables its extraction through wells. This project was preceded by steam stimulation of some wells, followed several years later by a small-scale test. The entire development project is designed to determine the technical and economic viability of thermal-recovery projects in the Eocene reservoirs of the Wafra Field.
In 2016, the company completed a 3-D seismic survey covering the entire onshore Partitioned Zone. It is one of the largest land seismic programs ever undertaken, covering 1.1 million acres (4,600 sq km). Processing the new data is targeted for completion in the first half of 2017.
Beginning in May 2015, production in the PZ was halted as a result of continued difficulties in securing work and equipment permits. As of early 2017, production remained shut in, and the exact timing of a production restart was uncertain and dependent on dispute resolution between Saudi Arabia and Kuwait.
The shut-in also affected plans for both the Wafra Steamflood Stage 1 Project, a full-field steamflood application in the Wafra Field First Eocene carbonate reservoir with a planned design capacity of 100,000 barrels of crude oil per day, and the Central Gas Utilization Project, a facility construction project intended to increase natural gas utilization while eliminating natural gas flaring at the Wafra Field. Both projects have been deferred pending dispute resolution between Saudi Arabia and Kuwait.
Chevron licenses refining technology and supplies catalysts to Kuwait National Petroleum Co. (KNPC) refineries through our affiliates Chevron Lummus Global LLC (CLG) and Advanced Refining Technologies LLC. Advanced Refining Technologies has a minority interest in the Kuwait Catalyst Company.
CLG has licensed residuum desulfurization technology for two large KNPC projects – the new Al-Zour refinery project in 2006 and the clean fuels project at the KNPC’s Mina Abdullah and Mina Al Ahmadi refineries in 2007. Both projects are currently in the engineering, procurement and construction phase.
Saudi Arabian Chevron operates a storage and marine export facility at Mina Saud in the PZ.
Chevron markets Caltex®-branded lubricants and coolants in Kuwait through authorized distributors.
in the community
Chevron supports programs that benefit education, training and development, the environment, and nongovernmental organizations in the communities where we operate.
Saudi Arabian Chevron and the Kuwait Gulf Oil Co. co-sponsored one of Kuwait’s first surveys of plants and wildlife. Conducted by the Kuwait Institute for Scientific Research, the survey yielded valuable data and insights into the plants and wildlife in the vicinity of Joint Operations at Wafra. The program is part of Chevron’s commitment to environmental stewardship, which includes conserving biodiversity.
record of achievement
Chevron played a major role in developing the resources of Kuwait and the Middle East. Gulf Oil Corp., which became part of Chevron in 1984, discovered Kuwait’s super-giant Burgan Field in 1938. The discovery helped transform Kuwait into a top oil producer. As a 50 percent owner of the Kuwait Oil Co. (KOC), the company was involved in the production and management of Kuwait’s oil fields.
In 1968, we began licensing refinery technology and supplying catalysts to KNPC refineries and have since licensed several hydrocrackers and residuum desulfurization units at KNPC’s Mina Abdullah, Mina Al Ahmadi and Shuaiba refineries.
Under a 1994 agreement with the KOC, Chevron subsidiaries provided technical expertise for the continued development of the Burgan Field. The KOC agreement expired in 2008.
From 2003 through 2010, Chevron had a contract with the KNPC to share technical, operational and managerial knowledge with employees of the KNPC’s three refineries.
Chevron, the Kuwait Gulf Oil Co. and their respective predecessor companies have operated four oil fields in the onshore PZ since 1949, in keeping with a 1922 Neutral Zone Agreement through which Kuwait and Saudi Arabia share the natural resources jointly. In 2009, the 60-year agreement between the Kingdom of Saudi Arabia and Chevron predecessor Getty Oil Co. was amended and extended for another 30 years. Under the agreement, Chevron operates the kingdom’s 50 percent interest in PZ petroleum resources.
Getty Oil Co. became part of Texaco in 1984, and Texaco merged with Chevron in 2001. The Kuwait Gulf Oil Co. operates Kuwait’s 50 percent interest in the PZ.
In 2004, we celebrated a milestone when the onshore PZ’s operations surpassed 3 billion barrels of production. More recently, we entered the third phase of the long-term staged testing process for determining the technical and economic feasibility of using steamflooding to increase production from the onshore PZ’s Eocene heavy oil reservoirs.
health, environment and safety
Chevron is committed to a safe work environment and has achieved impressive results in the PZ. In 2016, employees and contractors of Saudi Arabian Chevron at Mina Saud and Wafra logged more than 10 million work-hours without a Days Away From Work injury and drove more than 9 million miles without a major crash.
Chevron is committed to improving the quality of life of all our employees and in the communities where we operate. For example, our PZ hospital and operations field clinic provides support to our employees, their families and other community members.
With regard to environmental stewardship, Joint Operations has made significant progress in its Zero Discharge Initiative. The aim of this program is to eliminate surface disposal of water from production and to remediate former water collection areas to international standards. By the end of 2015, 95 percent of the former pit area was reclaimed, and there was zero discharge of water from production under normal operating conditions. Remediation is currently ongoing.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Website contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “could,” “should,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on schedule,” “on track,” “is slated,” “goals,” “objectives,” “strategies,” “opportunities” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward- looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemicals margins; the company's ability to realize anticipated cost savings and expenditure reductions; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of the company's suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats and terrorist acts, crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries, or other natural or human causes beyond its control; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; the impact of the 2017 U.S. tax legislation on the company's future results; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company's ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 19 through 22 of Chevron’s 2017 Annual Report on Form 10-K. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.