Petrofac in second major Kuwaiti deal

Deals to consolidate company's position in the Gulf country

Petrofac has won its second large contract in Kuwait in less than two weeks as the nation seeks to raise oil output capacity and expand power generation. Yesterday, the UK-based oilfield services company said it had won a 123 million dinar (Dh1.57 billion) contract from Kuwait Oil Company (KOC) to install a central facility for pumping effluent and seawater into the Raudhatain and Sabriyah oilfields to push out more crude.

Petrofac has also recently won a 116.39m dinar contract from the state-owned oil company to install pipelines from the Gulf coast to bring imported fuel oil and gas to two power stations. "We are delighted to have secured two contracts with KOC in two weeks," said Maroun Semaan, the group chief operation officer for Petrofac. The deals would help consolidate Petrofac's competitive position in Kuwait and the Middle East, Mr Semaan said. For the past few years, Kuwait has suffered from severe summer power cuts.

Its first new power station in more than 20 years is due to start operating next year. Kuwait is also short of fuel for power generation and imports fuel oil and liquefied natural gas. Despite the generally lower efficiency of the process, Kuwait is turning more to water injection in place of gas injection to boost crude production from mature oilfields. Extended bickering between Kuwait's elected parliament and its government have hampered programmes to increase oil production and refining capacity, and develop gasfields.

Plans to build a 615,000 barrel-a-day refinery in the emirate at a cost of US$15bn (Dh55.09bn) have been on hold for the past two years. In 2008, the Supreme Petroleum Council cancelled five contracts awarded by the state refiner, Kuwait National Petroleum Company, after parliamentarians questioned the deals. They cannot be re-tendered without the council's approval. Kuwait consistently pumps less oil than the UAE, although at 101.5 billion barrels its reserves are 3 per cent higher.