L1 · Reservoir & Wells - key uncertainty
L2 · Surface & Water - emerging execution constraint
L3 · Gas & Midstream - demonstrated local constraint
L4 · External System - system-level exposure
L✕ · Execution Capacity - cross-cutting
1
▼
KOC achieved 2.72 MMbpd for the second consecutive year. FY2025/26: 751 new oil wells + 1,175 workovers.
The execution is not the problem. The new uncertainty is restart behaviour of mature waterflooded fields after prolonged shut-in.
If resolved: water handling becomes the next constraint.
Pressure maintenance
Shut-in recovery profile
Water injection dependency
Jurassic drilling
FY2025/26 crude output
2.72 MMbpd
2nd consecutive year meeting annual target. 751 new oil wells + 1,175 workovers. Source: KPC AR 2025/26.
Gap to target
1.28 MMbpd
Required additional capacity to reach 4.0 MMbpd by 2035. Cannot be created by drilling alone - every layer must move in parallel.
Gas: non-assoc. production
Below target
KPC: variance "primarily attributed to external constraints beyond operational control." Record peak 29 Dec 2025 showed physical capability exists.
Restart uncertainty
⚠ New risk
KPC: 80% of stopped production recoverable in 1 month, remainder in 3–4 months. For mature waterfloods, restart time ≠ reservoir pressure recovery.
Offshore: constraint migration begins at discovery - Jazza field FY2025/26
Jazza Field: significant gas and condensate potential from the Minagish formation - Kuwait's first offshore gas discovery from this reservoir.
Jurassic wells drilled at Julaia and Ruqwa offshore. KPC "Seef" project: inviting IOCs to develop Nokhatha, Jazah, Julaia via service contracts.
Each new offshore barrel requires gas handling, marine facilities, processing and export integration before it becomes available production.
Constraint migration can begin at discovery - not only at FEED.
2
▼
Simultaneous construction across all producing zones. The design is known. The capital exists.
But KPC reports limited international contractor interest in water-management projects - an emerging execution constraint on the delivery pace.
If resolved: gas processing becomes the next constraint.
Produced water handling
Separation capacity
Contractor availability
Multi-zone simultaneous build
Active projects - East Kuwait
GC-1 / WIP-1
Oil Separation Gathering Center-1 + Water Injection Station-1. Under construction FY2025/26.
Active projects - South Kuwait
GC-3 / WIP-3/4
GC-3 + WIP-3 (South Kuwait). WIP-4 (South Kuwait). Concurrent with North & West Kuwait programme.
Active - North & West Kuwait
GC-25 / GC-30
Separation Facility GC-25 + WIP GC-30. New water injection networks in Sabriya, Bahra, Rawdatain.
Execution risk signal
⚠ KPC flag
"Limited interest shown by international contractors in water management projects" - KPC AR 2025/26. Engineering ≠ delivery. Capital ≠ capacity.
The water-oil chain - each link is a potential bottleneck
More oil → more produced water → more separation → more water injection for pressure maintenance → more power → more facilities → more CAPEX → more interfaces → more contractor demand.
The constraint does not live only in the reservoir. And when contractor markets tighten, the constraint is no longer purely technical - it is a delivery system constraint.
3
▼
FY2024/25: one missing 12" gas pipeline capped Khafji crude at 245 kbpd.
FY2025/26: acid-gas processing gaps in West Kuwait - same mechanism, different field.
Gas capacity and oil capacity are not independent variables.
If resolved: export route becomes the next constraint.
Acid-gas processing
Associated gas governance
Gas flaring rate
Offshore gas integration
Khafji case - FY2024/25
+25 kbpd
12" gas export pipeline delay → crude capped at 245 kbpd. MoC: two HP lines via 30" pipe → +40 MMSCFD → crude 270 kbpd. Gas flaring −18 MMSCFD.
West Kuwait - FY2025/26
Active study
KOC: comprehensive study of acid-gas processing capacity constraints across gathering centres + gas networks → identified gaps constraining crude oil production.
Field trials launched
6 experiments
West Kuwait Ops + GC-32. Target: increase crude production, reduce flaring, enhance gas processing efficiency. Same mechanism as Khafji - different geography.
Gas flaring rate FY2025/26
0.54%
Maintained below 0.80% target despite 15-day AGRU shutdown at Mina Al-Ahmadi. West Kuwait is where the processing gap is most acute.
The mechanism - active in two consecutive years
FY2024/25 Khafji: gas export gap → oil production cap → MoC fix → constraint removed.
FY2025/26 West Kuwait: acid-gas processing gaps → crude production constrained → 6 field experiments launched.
This is not an isolated incident. Gas handling is a recurring constraint on oil production in Kuwait's associated-gas environment. The constraint migrates in geography, not in mechanism.
4
▼
Kuwait has no bypass pipeline around Hormuz. When export availability collapsed in 2026,
nameplate production capacity became irrelevant. Project Shaheen ($16bn) monetises the infrastructure between production and export. It does not create an alternative route around Hormuz.
KPC CEO: "biggest shock to Kuwait's oil sector since the Iraqi invasion of 1990."
Strait of Hormuz - no bypass
Nameplate ≠ exportable
Shaheen / Peregrine capital
Force majeure shut-in
Pre-war production
~2.6 MMbpd
Jan 2026. Meeting OPEC+ quota. Facilities operational. Export route open. All four layers aligned.
2026 trough
~490 kbpd
Less than one-fifth of pre-war level. Reservoir intact. Facilities intact. Export availability - collapsed. Production capacity ≠ exportable production.
Project Shaheen / Peregrine
$16bn
Signed Jul 2026. Blackstone/Brookfield/KKR 49% in JV. KOC retains 51% + full ownership/operational control. $7.85bn upfront for CAPEX. Does NOT create Hormuz bypass.
Kuwait bypass capacity
Zero
Saudi Arabia: East-West Pipeline to Yanbu ~5–7 MMbpd. UAE: ADCO Pipeline to Fujairah ~1.8 MMbpd. Kuwait: 13 pipelines, 320 km - all routes terminate at Gulf terminals.
KPC FY2025/26: "biggest shock since the Iraqi invasion of 1990"
KWD 2.155 billion net profit despite Iranian attacks on refineries, tankers, production facilities and KPC infrastructure.
Force majeure clauses activated across contractual frameworks. Supply chains reoriented.
Non-associated gas production fell below annual target - "external constraints beyond operational control."
This layer can override all four engineering layers simultaneously. It belongs in every FEL Basis of Design.
✕
▼
KOC is drilling at a 5-year high, building water systems in every zone, fixing gas processing and progressing offshore.
All at once. KPC flags limited contractor interest in water projects. The engineering solution is known.
The delivery capacity to execute it may not arrive at the required pace.
Contractor market tightness
Parallel programme execution
Schedule interaction risk
Supply chain resilience
Simultaneous active programmes
All zones
Drilling (751 wells), water injection (6+ facilities), separation (multiple GCs), gas processing (6 field trials), offshore (Jazza/Julaia/Ruqwa), Seef IOC programme.
Contractor signal - KPC AR 2025/26
⚠ Flagged
"Limited interest shown by international contractors in water management projects" affects project delivery pace. Capital ≠ execution. Design ≠ delivery.
The question a reservoir model cannot answer
Can the reservoir produce 4 MMbpd? - This is a subsurface question.
Can the industry deliver all required infrastructure at the rate the subsurface programme is creating production? - This is an execution system question.
These are different questions. A FEL-2 concept study that answers only the first is incomplete.
The Study Manager must ask: what becomes limiting when each discipline succeeds - and is there delivery capacity to resolve it in time?
The production chain - the most restrictive combination of constraints determines actual system output
Reservoir potential
→
Sustainable production
→
Available production
→
Exportable production
→
Monetisable production
→
Realisable value
The minimum is not fixed. It moves as constraints are removed, fields mature, infrastructure expands and external conditions change.