KUWAIT OIL UPDATE -- MARCH 26, 2003

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001101 SIPDIS NOFORN STATE FOR TASK FORCE 1 - EB ACTION OFFICER STATE ALSO FOR EB/ESC AND NEA/ARP TREASURY FOR OASIA USDOC FOR 4520/MAC/AME DOE FOR IE - L. COBURN AND C. WASHINGTON E.O. 12958: DECL: 1.6 X5, X6 TAGS: EPET KU SUBJECT: KUWAIT OIL UPDATE -- MARCH 26, 2003 REF: KUWAIT 1078 AND PREVIOUS Classified By: DCM Frank C. Urbancic for reasons 1.5. (B) and (D) ¶1. (U) Local press reports on 3/26 noted the visit of the acting Minister of Oil, Sheikh Ahmed Al-Fahed Al-Sabah to the Ratqa oil field where he met with the Kuwait oil firefighting team. The press report notes the cooperation of the Kuwaiti team with an American team could result in all the fires in the Rumaila field being extinguished within ten days. The report also states that work was delayed 3 hours on Tuesday because of poor weather; no work was scheduled for Wednesday to allow the teams to integrate their efforts. ¶2. (C/NF) Embassy notes that despite earlier statements that KOC would increase production from the Ratqa field in northern Kuwait by up to 30,000 bpd in order to reduce reservoir pressure and advance firefighting efforts in the southern Rumaila field, KOC numbers over the last few days have shown a drop in production from the north. When Embassy began receiving KOC reports, KOC North production was 423,432 bbls (March 17). Today's figure for KOC North is almost 5.5% below that (400,265 bbls). Separately, post notes that stocks of Kuwait Export Crude have grown from 4,502,279 bbls on March 17 to 5,816,692 bbls on March 26 - a 29% increase in nine days. While we suspect this is well within normal operating limits, it could also be interpreted as a slowing of regularly scheduled tanker loadings. Post is seeking clarifications on these issues. ¶3. (C) Following is unedited data set received from Kuwait Petroleum Corporation afternoon of 3/26/03. Explanatory comments follow. (Begin Report) Kuwait Petroleum Corporation Daily Crude Production All figures in bbls This report covers activities from 0500 3/25/03 to 0500 3/26/00 Total Kuwait Production 2,445,041 KOC Proper: South East: 1,370,404 West: 353,878 North: 400,265 Total: 2,124,547 Wafra Joint Operations: R/B to KOC 147,333 R/B to KNPC 0 R/B to SAT 0 R/B total 147,333 Eocene 32,661 KGOC: Khafji 120,500 Hout 20,000 KEC Receipt 2,254,008 (API 30.6, Salt PTB 25.8) KEC Stock 5,816,692 KEC Ullage 8,377,039 (End Report) 4.(C) Explanatory Comments: Wafra Joint Operations refer to onshore concessions in Saudi-Kuwait divided zone operated by Saudi Arabian Texaco (SAT). R/B refers to the two producing reservoirs -- Ratawi and Burgan. KOC is Kuwait Oil Company KNPC is Kuwait National Petroleum Corporation KGOC is the Kuwaiti successor to Arabian Oil Company (AOC), which previously operated a concession in the offshore portions of the Saudi-Kuwait divided zone -- AOC still operates the fields under a service agreement. KEC refers to Kuwait Export Crude, the country's export blend. Salt PTB refers to pounds of salt per thousand barrels of crude oil. JONES