Environmental & Social Review Summary
Project Number
31492
Company Name
KUWAIT ENERGY COMPANY KSCC
Date ESRS Disclosed
Apr 20, 2012
Country
Middle East, Pakistan, and Afg Region
Region
Middle East
Last Updated Date
May 4, 2024
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Jun 1, 2012
Signed : Jun 28, 2012
Invested : Dec 18, 2012
Sector
Oil and Gas Production (Includes Development)
Industry
Metals and Mining
Department
Regional Industry INF MCT
Project Description
Kuwait Energy, a privately owned company and existing IFC client, is an oil and gas exploration and production (“E&P”) company focused on the Middle East/ North Africa region. The business was founded in 2005 by former employees of Kuwait Oil Company. During the period between 2005 and 2012, Kuwait Energy has accumulated 50 production, development and exploration licenses via license bidding and acquisition.
Funds from the proposed investment will help finance Kuwait Energy’s investment program in the ongoing operations and development of Kuwait Energy assets in Egypt, Ukraine and, potentially, Russia. Consequently the scope and purpose of the current review is to i) provide an update on Kuwait Energy activities at these operated assets and ii) provide an overview of progress against the existing action plan.
Kuwait Energy has working interest proved and probable (“2P”) reserves of 235.3 million boe. The group’s production has increased steadily over the years and produced, at year end 2011, at a rate of approximately 17,500 boe per day.
Principle activities across the Kuwait Energy portfolio IFC has invested in during the period following IFC’s previous disclosure in 2010 include:
Egypt - Abu Sennan: Since Kuwait Energy became the operator of the block in July 2009, six commitment wells have been drilled resulting in four successful discoveries. A supporting field development plan is currently in progress to declare commerciality on the concession.
Egypt – Burg El Arab: Similarly, Kuwait Energy became the operator in July 2009 and commenced the drilling campaign with two successful exploration wells followed by five development wells. The BEA #9 development well, which had a deeper exploration objective, discovered oil in the lower Bahariya.
Egypt – Area A: Since January 2011, Kuwait Energy has drilled three exploration wells of which two were successful and four development wells. Additional processing facilities were also installed in Area A.
Ukraine – Bilousivsko-Chornukhinska/ North Yablunivska blocks: In 2010, Kuwait Energy drilled one development well in the Ukraine. Projected production rates from this well were not considered to be commercially viable. In 2011, the group was granted the Bilousivsko-Chornukhinska development license for 20 years and North Yablunivska exploration license for an additional 5 years.
Russia – Luzskoye/ Chikshina: In 2011, Kuwait Energy drilled 2 development wells in Luzskoye. The group also acquired 28 square kilometers of 3D seismic data at the Luzskoye block.
Kuwait Energy is also a non-operating partner in Yemen, Oman, Pakistan and a block in Iraq. The group is operator of a block in Latvia, and additional separate blocks in Yemen and Iraq. These non-operated interests and operated interests in Pakistan, Oman, Latvia and Iraq do not form a part of the current investment or previous investments IFC has made with Kuwait Energy. IFC has previously invested in Kuwait Energy’s Yemen operated activities, although the current investment will provide no additional funding to this asset.
Funds from the proposed investment will help finance Kuwait Energy’s investment program in the ongoing operations and development of Kuwait Energy assets in Egypt, Ukraine and, potentially, Russia. Consequently the scope and purpose of the current review is to i) provide an update on Kuwait Energy activities at these operated assets and ii) provide an overview of progress against the existing action plan.
Kuwait Energy has working interest proved and probable (“2P”) reserves of 235.3 million boe. The group’s production has increased steadily over the years and produced, at year end 2011, at a rate of approximately 17,500 boe per day.
Principle activities across the Kuwait Energy portfolio IFC has invested in during the period following IFC’s previous disclosure in 2010 include:
Egypt - Abu Sennan: Since Kuwait Energy became the operator of the block in July 2009, six commitment wells have been drilled resulting in four successful discoveries. A supporting field development plan is currently in progress to declare commerciality on the concession.
Egypt – Burg El Arab: Similarly, Kuwait Energy became the operator in July 2009 and commenced the drilling campaign with two successful exploration wells followed by five development wells. The BEA #9 development well, which had a deeper exploration objective, discovered oil in the lower Bahariya.
Egypt – Area A: Since January 2011, Kuwait Energy has drilled three exploration wells of which two were successful and four development wells. Additional processing facilities were also installed in Area A.
Ukraine – Bilousivsko-Chornukhinska/ North Yablunivska blocks: In 2010, Kuwait Energy drilled one development well in the Ukraine. Projected production rates from this well were not considered to be commercially viable. In 2011, the group was granted the Bilousivsko-Chornukhinska development license for 20 years and North Yablunivska exploration license for an additional 5 years.
Russia – Luzskoye/ Chikshina: In 2011, Kuwait Energy drilled 2 development wells in Luzskoye. The group also acquired 28 square kilometers of 3D seismic data at the Luzskoye block.
Kuwait Energy is also a non-operating partner in Yemen, Oman, Pakistan and a block in Iraq. The group is operator of a block in Latvia, and additional separate blocks in Yemen and Iraq. These non-operated interests and operated interests in Pakistan, Oman, Latvia and Iraq do not form a part of the current investment or previous investments IFC has made with Kuwait Energy. IFC has previously invested in Kuwait Energy’s Yemen operated activities, although the current investment will provide no additional funding to this asset.
Overview of IFC's Scope of Review
IFC’s environmental and social (“E&S”) review of the activities relating to this proposed investment consisted of appraising technical, environmental, health, safety and social information submitted by Kuwait Energy (“Kuwait Energy” or the “Company”). IFC’s review comprised meetings at Kuwait Energy’s offices in Kuwait City and site visits to Kuwait Energy’s operated ‘Area A’ facilities in Egypt. Corporate and portfolio activities were discussed with the senior management team and discussions with Kuwait Energy’s corporate health, safety and environment (“HSE”) manager in Egypt. The review benefited from due diligence carried out for two previous rounds of IFC financing in 2009 and 2010 to support the group’s activities in Egypt, Russia and Ukraine.
The IFC Environmental and Social Review Summary (“ESRS”) for the first investment was publicly disclosed on May 19th, 2009 and the subsequent disclosure on April 6th 2010. Following a restructuring of the business in 2011, the Company now operates under the name ‘Kuwait Energy’ (previously disclosed by IFC as “Kuwait Energy Company”, or “KEC”).
The IFC Environmental and Social Review Summary (“ESRS”) for the first investment was publicly disclosed on May 19th, 2009 and the subsequent disclosure on April 6th 2010. Following a restructuring of the business in 2011, the Company now operates under the name ‘Kuwait Energy’ (previously disclosed by IFC as “Kuwait Energy Company”, or “KEC”).
