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SUPPLY
As a member of OPEC Kuwait restricted oil output for many
years prior to 2003 and also saw production decline during the 1st Gulf
War.
Oil production, the bulk of which comes from the giant Burgan field,
peaked in 1973 and, despite new investment in other fields, especially
near the Iraqi border, the country has been struggling to match former
levels. However, after a period of output restriction in 2009 and 2010,
it is forecast that growth will occur up to 2016, as oil from the old
northern fields are exploited. Subsequently decline at Burgan will
dominate. Oil production from the Neutral Zone, shared by Saudi Arabia,
will increase a little over the same period.
Kuwait’s associated gas production is due to expand considerably as
associated gas percentages increase in the oil fields and as new
infrastructure is built.
DEMAND
Kuwait’s oil and gas consumption are both increasing as
the region’s economy has been strong in the high oil price environment
and more stability in Iraq. A brief flat period will be followed by a
reurn to rising oil use. Exports of oil are also growing but will
flatten off after 2015.
Kuwait may avoid having to import gas, which it uses for electricity
generation, desalination plants and for residential markets, if its oil
development programmes can proceed effectively. However the gas balance
depends on how much is needed to sustain production at its declining oil
fields.
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