Kuwait mulling oil options if Hormuz is closed

Kuwait Petroleum Corp is considering alternative ways of exporting crude if the Strait of Hormuz is closed, including the possibility of transporting oil to the United Arab Emirates, said CEO Farouk al-Zanki. “We’re discussing many scenarios but we have not decided which,” al-Zanki told reporters on Monday in Kuwait. “Of course this has to be decided at a much higher level than KPC.” The possibility of exporting crude through the UAE is “an idea someone brought up,” al-Zanki said. Such a decision has to be taken in coordination with other Gulf Cooperation Council members, he added. Iran threatened earlier this year to close the waterway at the mouth of the Persian Gulf in response to sanctions that the US and Europe are imposing because of the Islamic republic’s nuclear programme. A pipeline that would allow crude oil from the UAE to bypass the Strait of Hormuz separating the country from Iran is almost complete and will be operational by May or June, UAE Oil Minister Mohamed al-Hamli, said in January. Kuwait has no firm plans to store oil on tankers outside the Gulf, “but this could be thought of,” al-Zanki also said. “It’s an idea that was discussed before, this could be a choice.” Kuwait, the fourth-biggest producer in the Organization of Petroleum Exporting Countries, plans to use more gas to produce power and free up more of its crude for export, al-Zanki said. The country uses 350,000 barrels of oil-equivalent in summer months and will need 4 billion standard cubic feet per day of gas by 2030, he said. Kuwait, which imports 500 million standard cubic feet per day of liquefied natural gas in the summer months for power generation, may start to import throughout the year as soon as 2013, according to al-Zanki. Kuwait, which pumps an average of 3 million barrels a day, has spare output capacity of 150,000 to 200,000 barrels, Kuwait Oil Co chairman Sami al-Rushaid told reporters on Monday. The country will conduct surveys of undersea oil reservoirs this year “to determine whether to go ahead with offshore drilling,” which will probably take place in 2012, he said. Kuwait may need help from foreign oil companies depending on the complexity of the reservoirs, al-Rushaid said.