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The year of 2015 witnessed significant challenges placed
by the oil price on the oil and gas industry. Oil prices
have been in decline since mid-2014 and have created
difficult market conditions, especially for exploration
and production companies. These conditions have
contributed to the net financial losses Kuwait Energy is
reporting for 2015. While we remain optimistic about
the future of oil prices and the market, we are working
towards managing the lower oil price risk by reducing
our costs across the board, rescheduling projects,
negotiating better payment terms with suppliers and
arranging financing to support development projects.
In 2015, Kuwait Energy achieved a number of key
business and operational milestones. On the operational
front, we commenced oil production in Block 9 in October
2015. We are proud to have begun production within a
year of making the discovery in December 2014. This
would not have been possible without the full support
of Iraq’s Ministry of Oil and our partners, most notably
the South Oil Company. In Egypt, we completed the gas
plant and pipeline at Abu Sennan yielded an increase
in our production from the field. This was the result of
the excellent relationship between Egyptian General
Petroleum Corporation (EGPC) and Kuwait Energy
working together to deliver the project with significant
cost savings. It also demonstrates our commitment
towards the environment by eliminating gas flaring.
On the business front, the Company completed the farm-
out of a 10% working interest in Block 9, Iraq to EGPC.
We have acquired an additional 25% working interest
in Burg El Arab, Egypt and obtained a 25 year service
contract in Oman.
The political situation in Yemen has forced us to halt
Yemen production as tankers are unable to get into
the country’s port to export the crude. Nevertheless,
we keep monitoring the situation in Yemen and aim to
resume production once the circumstances allow for it.
At year-end 2015, the Group’s proven and probable
working interest reserves stands at 818 mmboe with
all assets independently audited by Gaffney Cline &
Associates (GCA).
The Board continues its commitment to high standards
of governance and continues to work towards full
compliance with the principles and provisions of the UK
Corporate Governance Code. With regards to Health,
Safety, Sustainability and Environment (HSSE), we
continuetoenhanceourpoliciesandprocedurestoensure
a safe and secure environment for our stakeholders. Key
examples in 2015 include work for the commencement
of oil trucking from Block 9 and the introduction of a
HSSE Leadership Auditing programme. Our Corporate
Social Responsibility programme endeavours to make
an effective and sustainable difference to the lives of the
people living in the areas we operate in. Our initiatives
continue to improve children’s lives, provide medical
support and empower youth.
In the coming years, our operations will remain focused
on completing our development activities in Siba and
Block 9 in Iraq to achieve the assets production targets. To
our shareholders, we remain committed to work for their
best interests and creating value in everything we do.
I would like to thank Kuwait Energy Board, employees,
shareholders and other stakeholders for their continued
support in the pursuit of the Kuwait Energy Vision that is
'to be the pre-eminent Middle East based independent
oil and gas company'.
Dr. Manssour Aboukhamseen
Executive Chairman
Executive Chairman’s Message
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