Welcome to Kuwait
Overview of Resources
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Welcome to Kuwait
Kuwait is located in the Middle East, and borders the Persian Gulf, between Saudi Arabia and Iraq. The country covers a total area of 17,818 km2 and has a total population of 2,646,314 as per 2012 estimates. It experiences intensely hot summers and short, cool winters.
|The national flag of Kuwait.
Image Credit: CIA Factbook.
Natural gas and petroleum are the major mineral resources of the country. In the early 1920s, the government started focusing on oil from the pearl industry after reports that the presence of bituminous substances in the desert indicates the underground oil reserves. The first oil concession was granted to the Kuwait Oil Company Limited in December 1934. Oil deposits were discovered at Burgan in 1938. The country exported oil in 1946 for the first time. Kuwait Petroleum Corporation (KPC) was nationalized in 1975 and manages the country’s oil industry with operations in six continents.
The country has a wealthy and steady economy thanks to about 104 billion barrels of crude oil reserves, which is nearly 7% of the total world reserves. The GDP of the country was $155.5 billion in 2011 compared to $143.7 billion in 2010. Half of the country’s GDP growth is contributed by the petroleum exports.
Overview of Resources
The country is awash with resources such as petroleum and its derivatives and natural gas.
The oil industry accounts for nearly 92% of the country’s total exports and 93% of the government revenue. The oil and gas sector accounted for 43% and refined petroleum accounted for 2% of the GDP in 2009.
The map of Kuwait. Image Credit: CIA Factbook
F.L. Smidth & Company A/S has installed a new cement production line at Shuaiba for Kuwait Cement Co. K.S.C. The new plant has a production capacity of 5,500-metric-ton-per-day (Mt/day) and would double Kuwait Cement’s production capacity.
KOC and Royal Dutch Shell have signed a five-year technical service contract for developing non-associated natural gas deposits in Kuwait. KOC has plans to increase the country’s non-associated natural gas output to 28 million m3 per year by 2015.
The total export value of the country increased to $67 billion in 2010 from $52 billion in 2009, of which crude oil exports amounted to nearly $62 billion in 2010 compared to $47 billion in 2009. The country’s total exports amounted to $22 billion in 2010 compared to $20 billion in 2009.
According to recent reports, the country’s crude oil production increased from 347,000 barrels per day (bpd) in 2011 to an average daily production of 2.7 million bpd.
Kuwait’s economy is structured around the production and refining of oil and petroleum products. The government has plans to increase its oil production to 4 million barrels per day by 2020 owing to the rise in oil prices in the global market. The country has recently experienced a 20% increase in government revenue, which has led to higher budget expenditures. In an attempt to diversify its economy, the country has passed an economic development plan that agrees to spend $130 billion in the next five years to attract more foreign investment and strengthen private sector participation in improving its economy.
In addition, the development of known non-associated natural gas deposits would increase the supply of natural gas from the country. The country is likely to continue expanding the Kuwaiti petroleum production capacity to emerge as one of the strongest economies in the world.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.