KOC CHAIRMAN DISPUTES REPORT ON KUWAIT'S

UNCLAS KUWAIT 000206

SIPDIS

SENSITIVE
SIPDIS

LONDON FOR TSOU
DEPARTMENT OF ENERGY FOR IE, MOLLY WILLIAMSON
EB/ESC/IEC FOR GALLOGLY, DOWDY

E.O. 12958: N/A
TAGS: ENRG EPET ECON KU OIL SECTOR
SUBJECT: KOC CHAIRMAN DISPUTES REPORT ON KUWAIT'S
DIMINISHED OIL RESERVES


1. (U) A recent Petroleum Intelligence Weekly (PIW) report
on Kuwait's diminishing oil reserves has caused a minor buzz
within the Kuwait oil sector and other interested parties.
The report (PIW, Vol. XLV, No. 4, January 23, 2006) quoted
"data circulated within KOC" as showing that Kuwait's
remaining proven and nonproven reserves are about 48 billion
barrels total, as opposed to the 99 billion barrels that
Kuwait publicly claims. The PIW article reported that, of
this 48 billion total, 20 billion barrels are in the Burgan
field and 17 billion in the northern oilfields. Western
Kuwait contains 8.5 billion barrels, according to the report,
with the divided zone between Kuwait and Saudi Arabia making
up the remaining 2.3 billion barrels. The article goes on to
state that only 24 billion of the 48 are actual proven
reserves.


2. (U) Kuwait Oil Company Chairman Farouk Al-Zanki was
quoted in online and local news reports on January 21 and 22
as disputing the report, saying "I have no idea where they
got this from...I don't think it's accurate." He added "We
are always evaluating our reserves. ... Up to now, they are
set at 95 billion barrels. ... I don't know who gave them
(PIW) those figures, but I don't think it's 100% accurate."
He concluded, "One year we add (reserves),another year we
don't and in the one after that we add more. The additions
of reserves are not fixed, and each year we are adding
reserves."


3. (SBU) An American oil executive with a long history in
Kuwait and intimate knowledge of Kuwait's oil industry told
Econ Officer on January 22 that he thought the PIW figures
were actually high and that Kuwait's total reserves might be
even less. He called the 99 billion barrel figure "a
political number" that Kuwait uses to justify its OPEC quota.
The executive said that the proven reserves were in the
range of 25-26 billion barrels, and that these were the
actual numbers "hanging on the wall in KOC's hallways." He
said that, in his estimation, Kuwait had about 12 billion
proven barrels in the Burgan field, 5 billion in the northern
oilfields, 3 to 4 billion in west Kuwait, 2 billion in the
onshore divided zone and 2 billion in the offshore divided
zone. He estimated that Kuwait has an additional 12 billion
barrels of heavy oil in the ground, but that only 6 billion
are recoverable.

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Visit Embassy Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
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LeBaron