Kuwait charts path to 4 million bpd oil capacity

Kuwait has set out a long-term plan to lift crude oil production capacity to 4 million barrels per day by 2035, up from about 3 million bpd at present, signalling a renewed push to secure upstream growth while managing the pressures of energy transition and market volatility. The target was outlined by Nawaf S. Al-Sabah, deputy chairman and chief executive of Kuwait Petroleum Corporation, who said the expansion would be driven by a mix of onshore optimisation and offshore development supported by international partners.

The plan reflects Kuwait’s assessment that oil will remain central to its economy for decades, even as global demand growth slows and energy systems diversify. Hydrocarbons still account for the bulk of state revenues and export earnings, and policymakers have repeatedly stressed the need to preserve market share within OPEC and beyond. Raising sustainable capacity rather than short-term output is viewed in Kuwait as a hedge against supply disruptions, geopolitical shocks and cyclical price swings.

Central to the expansion is a series of upstream projects designed to unlock new reserves and arrest natural decline in mature fields. Among them is the Al-Saif project, which is aimed at accelerating offshore exploration and development by drawing on the technical expertise and capital of foreign oil companies. Kuwait has long relied on domestic operators for upstream work, but complex offshore geology and the scale of investment required have pushed authorities to revisit models involving external participation.

Al-Sabah told CNBC Arabia that international oil companies have shown strong interest in entering Kuwait’s offshore sector, a shift that underscores changing dynamics in the country’s energy strategy. For decades, constitutional and political sensitivities limited foreign involvement in upstream production. More flexible contractual structures, combined with the need for advanced seismic imaging, deepwater drilling and enhanced recovery techniques, are now reshaping that stance.

Offshore prospects in Kuwaiti waters are seen as under-explored compared with neighbouring Gulf producers. Industry analysts note that while onshore giant fields such as Burgan remain prolific, incremental gains there are increasingly costly. Offshore development offers the potential for sizeable additions to reserves, though timelines are longer and execution risks higher. By partnering with experienced global players, Kuwait aims to shorten learning curves and contain costs.

Beyond Al-Saif, Kuwait Petroleum Corporation and its subsidiaries are pursuing brownfield upgrades across existing assets. These include enhanced oil recovery programmes using water injection, gas reinjection and digital field management to stabilise output. Investment plans also encompass drilling campaigns to replace produced reserves and infrastructure upgrades to handle higher throughput safely and efficiently.

The 2035 horizon places Kuwait’s ambitions within a broader regional contest over capacity growth. Saudi Arabia, the United Arab Emirates and Iraq have all announced or implemented projects to raise their maximum sustainable production levels. Within OPEC, capacity is a key determinant of influence, affecting quota allocations and the ability to respond to market imbalances. For Kuwait, maintaining relevance within the producers’ group is both an economic and strategic priority.

At the same time, the plan faces challenges from fiscal constraints and domestic politics. Large upstream projects require sustained capital spending over many years, and Kuwait’s budget is highly sensitive to oil prices. Periods of lower prices have previously forced delays or revisions to investment programmes. Parliamentary scrutiny of foreign involvement in the oil sector can also slow approvals, making execution dependent on political consensus.

Environmental considerations add another layer of complexity. International investors are under pressure to align projects with emissions targets, and host countries are increasingly expected to demonstrate credible decarbonisation pathways. Kuwait has committed to reducing the carbon intensity of its oil production through efficiency gains, gas utilisation and flare reduction. Officials argue that producing barrels with lower emissions will be essential to preserving demand in a carbon-constrained world.

Market conditions will ultimately shape how quickly and fully the capacity target is realised. Global oil demand growth is forecast to moderate in the coming decades, but absolute consumption levels remain high, particularly in Asia. Kuwait’s leadership has framed the expansion as a defensive move to ensure that its crude remains competitive as higher-cost producers exit the market. The focus on capacity rather than immediate output also allows flexibility to comply with OPEC agreements while keeping long-term options open.