quarterly magazine, issue no. 44, april 2008managing the environmental, health, and safety aspects...

Quarterly Magazine, Issue No. 44, April 2008

10 A woman’s imprints in the oil sector

18 KUFPEC directs oil wells around the world 22 e-portal project, a new oil

sector achievement14 Risk management in Abdulla Port refinery

In This Issue

KPC Mission

Kuwait Petroleum Corporation (KPC), fully owned by the State of Kuwait, is one of the world’s major oil and gas companies. It is focused on petroleum exploration and production, refining, marketing, petrochemical production & sales, and transport. KPC’s mission is to manage and operate these integrated activities worldwide in an efficient and professional manner. In addition, KPC is committed to growing shareholder value, while ensuring the optimum exploitation of Kuwait’s hydrocarbon resources. KPC has an important role in contributing to the development of the Kuwaiti economy, developing a national workforce, maintaining superior commercial and technical expertise, and pro-actively managing the environmental, health, and safety aspects of KPC’s businesses.

Quarterly MagazineIssue No. 44, April 2008

Editor-in-Chief

The KPC World team would like to extend their appreciation to everyone who contributed editorial material, information, and photos for this magazine issue.

CorrespondenceP.O. Box : 2656513126 Safat, KuwaitFax: (965) 4994991Website: www.kpc.com.kwEmail: [email protected]

28 Kuwait ranks first internationally in the fertilizer industry 32 34Major project to extract

ethane at gas liquefaction units

Marketing Sector adventures in Australia

26The Oil Sector Complex, a new perspective for a brighter future

Talal Al-Khalid Al-SabahManaging Director, Govermental,Parliamentary, Public and Media Relations

Editorial Team

Media Relations Dept.

Design, Layout & Print byAl-Assriya Printing Press Publishing & Dist. Co. w.l.l.

In its efforts to enhance its international position, KPC has recently launched an e-portal project, which aims to promote an electronic culture among oil sector employees. This e-portal will boost KPC’s efficiency at the international level, improve workplace efficiency between KPC and its subsidiaries, and upgrade the professional level of its workforce, which is considered to be the main goal of KPC senior management.

Oriented towards human performance and human resources, special attention to career opportunities among Kuwaitis brought about the development of qualified national cadres, whose impact is obvious in the oil sector in particular, and in the State of Kuwait’s economy in general.

Landmark results achieved by the Petrochemicals Industry Company during 2007-2008 would never be possible without a qualified and well-trained workforce, for example.

Among PIC accomplishments, the company’s yearly export of urea has increased to 1.7 million tons. It has also increased its yearly exports of ammonia to 150.000 tons in addition to opening new markets and developing new relationships with clients.

The new issue of KPC World includes an important interview with Maha Mulla Hussein, Chairman and Managing Director, PIC, which sheds light on the important and vital role of women in the oil sector. Other topics include the launching of the Risk Management project in Abdullah Port refinery and the extraction of ethane in Ahmadi Port refinery.

Editorial

Talal Al-Khalid Al- SabahManaging Director, Govermental,Parliamentary, Public and Media Relations

Issue No. 44 - April 2008 5

Former Chief Executive Officer, KPC, Hani Abdul-Azeez Hussein, was honored by oil sector officials and employees marking 35 years of achievements. They highlighted his good manners, high ethics and principles as well as good sense of humor, which positively affected everyone he met during his tenure.

Hani Hussein was very enthusiastic to foster ‘the one family spirit’ among all KPC and subsidiary employees by supporting, and personally participating in many varied social events, which left their mark in supporting the success of the company. Hani Hussein’s record of achievement is astonishing relative to his short tenure.

His achievements follow two parallel lines: the first and most important was developing the oil sector and its accompanied industries. The second was supporting the workforce, which constitutes the basis of Kuwait’s oil industry.

Hani Hussein modified KPC regulations towards enlarging the authority of its subsidiaries, adopting a strategic administrative model, installing the oil sector performance management system as well as forming committees and teams to develop regulations in the best interest of the oil sector such as KPC’s Higher Committee for Health, Security and Environment. KPC and its subsidiary teams developed a strategic plan to meet Kuwait energy requirements. Other regulations aimed to achieve oil sector objectives were also developed.

Hani Hussein also unified variances and advantages among Kuwaiti women in the oil sector, developed an early retirement system for the corporation’s professional ladder employees, amended the compensation and incentive system for oil sector employees (overtime, furniture donations, annual leave credit and the annual issuing date of tickets), along with many other legislations and regulations regarding KPC employee interests.

Kuwait’s oil sector will always be thankful for the performance and sustained efforts of Hani Abdul-Azeez Hussein as CEO of KPC, which led to the prosperity of one of the most important and vital companies in the State of Kuwait.

Oil Sector Honors Hani Hussein

Issue No. 44 - April 20086

Al-Shuwaib: EQUATE 3 Project to Be ReviewedSaad Al-Shuwaib, KPC Chief Executive Officer revealed that KPC is currently studying the EQUATE 3 Project in collabora-tion with Petrochemical Industry Company (PIC) following on the success of EQUATE 1 and the launch of EQUATE 2, next De-cember 2008.

Al-Shuwaib mentioned that KOC will start producing free gas dur-ing the next few days. The compa-nies approved for the 4th refinery bid will also be announced soon.

Al-Shuwaib said that Kuwait’s oil fields do not suffer from aging be-cause KPC and its subsidiaries con-tinue to use the latest technologies through important contracts with international companies, which supply technical consultations together with new technological

systems for refining, collecting re-sources, and the gas - liquefaction associating process.

Kuwait/Sinochem Sign Preliminary Agreement Supplying crude oil to the Sinochem refinery is a step for-ward to achieve Kuwait ambitious expansion plans in Asia. Kuwait and the Sinochem Company has signed a preliminary agreement to supply crude oil for the company’s refinery, which will be established on the southeast coast of China with a total capacity of 240,000 barrels of oil daily. Leo Deesho, Sinochem Chairman, mentioned that “his company had reached an agreement with Kuwait to supply crude oil for his company.” With-in the same context, deals to build new refineries and petrochemical factories in China, Vietnam, and India will, hopefully, be reached next year. KPC is working with Sinopec, the leading Chinese oil refining company, to build a re-finery in south China with capac-ity ranging between 300,000-350,000 barrels of oil daily. This huge investment opportunity is waiting for China’s final approval.

Oil Sector Services and Kuwait Santa Fe Sign Agreement for Engineering Projects The agreement stipulates that Santa Fe assets, activities and employees will be transferred to OSS, which is a KPC subsidiary. Ali Al-Obaid, Managing Director, Oil Sector Services Company, con-sidered that the merger of Santa Fe with OSS was a primary step to-wards achieving the unification of the oil companies identity project. Al-Obaid went on to say that

Santa Fe’s services and duties will be carried out thoroughly by the Oil Sector Services Company, while adhering to Santa Fe’s poli-cies, which will be developed fol-lowing the company’s services development and quality control policies.

Kuwait Oil & Gas Promotes December Conference Nasser Saleh Al-Enezi, Chief Executive, Kuwait International Conference for Promoting Oil & Gas to be held in Kuwait later this year, stated that there are many in-dicators which support the sense that genuine investment opportu-nities in the oil & gas sectors sur-pass currently available local and international capacity.

Al-Enezi based his statements on trends in the international market-place that support the current role of the GCC private sector in the oil & gas industry. Furthermore, an overview of international mar-ket conditions in the Gulf area also indicate the same demands and direction.

The conference will be held in collaboration with local, regional and international companies spe-cializing in oil & free gas market-ing. According to Al Enezi, the conference aims to create genu-ine opportunities, paving the way for genuine ‘deals’. He explained: “Direct contact will help to estab-lish marketing relationships that enlarge cooperation, which, in turn, will reduce any sense of neg-ativity prevailing in private oil sec-tor companies. In this sense, this conference is considered to be a successful investment opportunity towards re-enforcing relationships among Gulf and international oil companies.


KOC Records 30 Million Safe Working HoursThe Kuwait Oil Company in col-laboration with the CK Korean Company registered a new record of 30 million continuous safe working hours, free of injuries and accidents.

This international record was achieved in very harsh climate conditions with a multi-national workforce to update the oil infra-structure, that is, the KOC South Kuwait Project. This recent bench-mark symbolizes the highest levels of security and safety standards achieved by KPC and its subsidi-aries in upgrading its oil facilities.

International Marketing Seeks to Boost SalesAbdul-Lateef Al-Houti, Manag-ing Director, International Mar-keting Sector, says that KPC does not control oil prices (rates) in Kuwait, but rather the internation-al stock markets does. He pointed out that annual contract rates are fixed in a way that does not al-low changes until contracts are renewed. “What we are currently working on is to boost sales,” Al-Houti said.

Regarding oil rate evaluations for KPC, he clarified that “contract value evaluation is based on cal-culating the average barrel of oil price in both Dubai and Oman together with the consideration of the KPC rate, which is settled be-fore signing the contract in agree-ment with the customer. This monthly rate varies, increasing or decreasing in the light of monthly price list revisions. Customers are to be informed about the variation rate. Moreover, the decision con-cerning the KPC rate depends on

neighboring country prices plus the oil demand rate in Kuwait—notably that daily announced prices are related to fixed crude oil, as for the KPC rate, which var-ies from one customer to another, is to be added.”

First Phase Oil Export Ports Development BeginsKuwait Oil Company (KOC) in collaboration with Hyundai Heavy Industries Company began Phase 1 execution of the Oil Ex-port Ports Project with a total cost KD 350 million. Phase 1 will in-crease export capacity to 2 million barrels of oil daily to meet further demands for 3 million barrels daily at the end of Phase 1.

This project includes the installa-tion of more than 27 kilometers of mostly underwater pipe lines, pump stations, and diverse oil-related fields.

What makes this project so signifi-cant is that the KOC Oil Export Ports Project involves the installa-tion of underwater pipelines in the Gulf.

The focus of this project aims to increase future oil sector capacity and Kuwait’s oil export obliga-tions in international markets.

Joint Kuwaiti-Japanese Oil Project to Be Built in VietnamIdemitsu Kosan and Mitsui Chem-icals, two Japanese companies announced a recent decision to launch a joint project with Kuwait Petroleum International Com-pany (KPI) in a new joint venture company.

An oil refinery called Nagy Son Oil Derivatives Complex, is to be

built in Vietnam with an estimated production capacity of 200,000 barrels of oil per day.

In a joint statement, the two Japa-nese companies stated that KPI (the international arm of Kuwait Petroleum Corporation) and Ide-mitsu Kosan will each hold a 35.1 percent share of the US$5.8 bil-lion project, while PetroVietnam, a Vietnamese government compa-ny will hold a 25.1 percent share and Mitsui Chemicals will have a 4.7 percent share in the project.

This statement confirmed that Japanese oil companies will build oil refineries outside of Japan for the first time.

The complex will be the second oil refinery built in Vietnam, 180 kilometers south of Hanoi, the capital of Vietnam.

A two-year preliminary period is required by the new company to conduct necessary studies and re-search, prior to actual construction of the oil complex. Kuwaiti heavy crude oil will be refined here by the end of 2013, the expected op-eration date.

The project will benefit from Ide-mitsu Kosan’s experience in the oil refinery business together with a stable supply of Kuwaiti crude oil. This project is designed to meet Vietnam’s increasing demand for oil products, which, at the mo-ment, relies on foreign supplies. PetroVietnam estimates indicate that demand on oil product will rise to 18 million tons by 2010.

All industry outlooks unanimously con-firm that the Kuwaiti oil sector is stand-ing on the threshold of a bright new era of progress and prosperity. What with large projects already in motion and bigger ventures all set to start, KPC’s present and the future never looked brighter.

The strategic directions for the year 2020 indicate that the only way to go from this point onwards is up. To en-sure the application of all strategic plans, KPC and its subsidiary companies are operating in two parallel lines, on the one hand, continuously developing ex-isting operations, while on the other, launching a number of major projects to strengthen the sector’s business for several decades ahead.

KPC Announcement

The Corporation announced the start of several big projects and investment opportunities that will ensure the en-hancement of upstream and down-stream activities, creation of new job opportunities, bigger dividends for the oil sector, and competitive investment opportunities for the private sector.

Moreover, KPC’s new management represented by Saad Al Shuwaib, the Chief Executive Officer and the new Managing Director, plans to implement a strategy of growth by expanding its in-

vestments in the Far East, and securing more outlets for Kuwaiti hydrocarbons. The CEO’s latest Asian tour showed that Kuwait’s growing investments in the region are encouraged and appreci-ated by both government officials and the private sector in the region. It also stands as a testament to the continued cooperation between KPC and its busi-ness partners in the Far East.

Market analysts observe that there is a strong sense of optimism, which prevails in the oil sector and Kuwait in general. They believe that Kuwait has positioned itself as the Gulf’s new commercial gate-way. It driven by an increasing desire to modernize its infrastructure and launch development projects directed toward increasing and developing its sources of revenues and achieving a more active national economy.

The decision - makers at KPC recognize that the Corporation is an integral part of the economy of Kuwait. They are looking forward to enhancing produc-tion and processing capabilities in vari-ous areas in order to increase revenues, distribute income and strengthen Ku-wait’s position as a major global energy producer.

In the translation of KPC’s strategic di-rections to diversify its operations and explore new investment opportunities, Saad Al-Shuwaib, CEO, announced

that KPC will form a 50/50 joint ven-ture with the Dow Chemical Company that will create a market leader, a global petrochemical company.

The venture will be a global petrochemi-cals company, expected to have revenues of more than $11 billion and employing more than 5,000 people worldwide.

It will have its headquarters in the United States. It will manufacture and market polyethylene, ethylenamines, ethanolamines, polycarbonate and poly-propylene products.

The venture will cement KPC and Dow’s historical and successful business alliance. The project has all elements of success as it enjoys KPC’s expertise as one of the world’s Top-10 energy/hy-drocarbon companies, and Dow’s tech-nology and market leadership including its Number 1 position in polyethylene, ethyleneamines and ethanolamines.

Dow Chemical Company

Dow Company is a diversified chemi-cal company that harnesses the power of innovation, science and technology to constantly improve what is essential to human progress. The Dow Com-pany offers a broad range of products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging

New World Arena KPC Forms Key Alliance with Dow Chemical

Press conference to announce partnership


and personal care products. Committed to principles of sustainability, Dow has annual sales of $49 billion and 43,000 people worldwide.

Notably, the new venture will build upon Petrochemical Industries Com-pany’s (PIC), a KPC subsidiary, feed-stock position and commitment to glo-bal petrochemicals growth. Dow will also maintain its world-class security, environment, health and safety stand-ards in the new venture. Customers, in turn, will benefit from an even stronger supplier having feedstock integration, global supply chain, advanced technolo-gies, resources to grow with customer demand, and an ongoing commitment to the future of the petrochemical in-dustry.

“We are creating a petrochemicals com-pany that will be a global leader from its first day of operation, an $11 billion company that is well positioned to grow profitably across the industry cycle,” said Andrew N. Liveris, Dow Chairman and CEO. “For Dow, this marks an impor-tant milestone in our transformational strategy: growing our basic businesses through joint ventures; reducing our capital intensity; and, freeing up cash to invest in our portfolio of Performance and marketplace businesses.”

For his part, Al-Shuwaib said that “through this joint venture, KPC enters

a new arena of specialty products based on leading global technologies,” he said and added, “the venture will enable PIC to expand and diversify its international petrochemical presence, while building on our long-standing relationship with Dow. By selectively investing in the downstream petrochemical business, we are maximizing the value of Kuwait’s hydrocarbon resources while diversify-ing our national economy and increas-ing job opportunities”.

The agreement in principle is subject to the completion of definitive agreements, customary conditions and regulatory approvals, and is anticipated to close in late 2008. To form the new company, Dow will sell a 50 percent interest to PIC in the business assets included in the transaction. In turn, both PIC and Dow will place their share of the assets into the joint venture, with each party then taking a 50 percent equity inter-est in the new company. The value of the five Dow global businesses that will form the joint venture is approximately $19 billion. Dow will receive approxi-mately $9.5 billion (pre- tax) from PIC for the 50 percent interest.

Dow and PIC have a great track record as partners, and this landmark joint-venture is expected to bring sustainable, long-term value to both companies and customers alike.

Commenting on the importance and significance of the venture, Maha Mulla Hussain, Chairman and Managing Di-rector of Petrochemical Industries (PIC) said “the joint venture between PIC and Dow will be positioned to flourish in high-growth economies through ac-cess to feedstock off takes from future KPC refineries in emerging regions. This will give the new company the dis-tinct advantage of full integration from feedstock’s to derivatives, while meeting growing customer demand in emerging markets”.

About the Products in the Venture

Polyethylene (PE) and polypropylene (PP) comprise more than half of world polymer demand. PE is the most widely used of all plastics and can be found in everyday products from food packaging, milk jugs and plastic containers to pipes and liners. PP is a versatile plastic used in fibres, packaging films, non-woven, durable goods, automotive parts, and consumer applications. Polycarbonate is an engineering thermoplastic used in applications such as optical media, elec-trical and lighting. Amines are a fam-ily of chemicals with a broad range of properties, used in various applications from wood treating and pharmaceutical processing, to coatings and consumer products.

Saad Al-Shuwaib, CEO, KPC


Maha Mulla Hussain:A Symbol of Commitment and Dedication

Women’s Contribution to the Oil Sector


Women are called «men’s sis-ters» as they support and as-sist their men in all steps towards development and ad-vancement. Kuwaiti women worked very hard in all fields, deserving the delicate and vital positions they held as ministers, ambassadors, and university presidents. Maha Mulla Hussain is one of Ku-waiti devoted women who becomes a symbol of commit-ment and dedication in oil sector. As a result of her high professionalism and sincere work, she was recently select-ed to be the Chairwoman and Managing Director of PIC, which is one of the major oil companies in Kuwait. KPC World had the opportunity to interview Maha Mulla Hus-sain to hear first-hand about what she believes contributed to her success and the leading role of women in overcom-ing challenges and obstacles.

She began her interview by saying: “The components of success are the same for both men and women. These in-gredients are a good effective education, honesty, dedica-tion, perseverance, commu-nication with others, cour-age in decision-making and taking full responsibility. I stress decision-making as a process that leads to success. In my opinion, the only ingredient that can characterize women is increased persistence taking into account the change of circum-stances. We need to exert every effort to prove ourselves. Fam-ily support is very im-portant to achieve ex-cellence and success”.

Q. What are the obstacles that you faced? Who supported you to overcome such obstacles?

A. Working in the oil sector is rather different than any other field. We need more time at work as well as the need for physical endurance. I faced all these challenges although I have also been working in factories which was a real challenge with long work hours (more that 12-13 hours of continuous work). Exerting all effort along with patience and perseverance are the answer.

Another challenge is communication. During your official duties and when you are promoted, you need to have permanent communication with the team you are working with. I was available in terms of communication 24 hours a day; therefore, issues and working concerns never left my mind. I managed to overcome such obstacles by means of creating a kind of balance between the challenges of the work system and my personal needs, thus I achieved my goals and success.

When we turn to issues of s u p p o r t a n d assistance, I feel that I’m lucky

as I have worked with a number of senior people and officials, who have a high degree of understanding of the role of women in society. They provided all kinds of support and encouragement, and within that framework I managed to discover my potential and prove myself.

Q. Have you set high goals that include the position of Managing Director?

A. I dreamed of being rewarded for my effort and hard work over the years. Therefore, I was ambitious, patient and commited to assume a leading position.

Q. You have worked a long time with KPC’s C.E.O. Are there certain kinds of communication styles between you and your colleagues that could facilitate more progress at PIC?

A. Saad Al-Shuwaib is, of course, a part of PIC. I have worked with him for a long time. I understand his management style with specific ways he does things. For example, I know his kinds of questions, intentions and interests. We are familiar with his concerns as well as his ways of working together with us. It makes everything easier.

Q. Saad Al-Shuwaib is known for this strict decision-making. Do you have the same decisive style or are there other methods you might use?

A. Strictness is always demanded: this is the rule, yet everyone has his or her own style and ways of dealing with different issues. The CEO has a particular character and style in work, meanwhile I have my own style in working through the system and imposing decisions along with a complete understanding of past and future issues.


Q. What is your vision about PIC and the oil sector?

A. In fact, KPC has a lot of major projects currently underway. We hope to implement these projects as soon as possible together with the efforts and loyalty of oil sector employees. Yet these projects are already currently underway and plans are developed following certain plans and guidelines. Our key concern now is how to develop employees at the oil sector in an

appropriate way so as to identify the really specialized capacities and teams, which will manage work skillfully and competently. My vision focuses on human resources development to be able to make progress without any outside consultative support.

Q. What are the reasons for the lack of some

specializations? Why has this shortage not been handled?

A. My point is that the oil sector focused only on the operation of factories and units, and executing vital projects. KPC has now moved into the international arena with bigger

challenges than simply operating

and establishing projects. For example, PIC has moved into the wider world as we now have projects in China. These projects require a new cultural viewpoint that can surpass past local or even regional limitations. New cultures abroad need new concepts and a very developed human resources team to fully accept Chinese, Indian and Vietnamese partners, in other words to accept the other. These concepts are a part of a new approach to cultural issues, which we hope to prevail among all employees in the oil sector. We also need people in human resources who can deal with banks, who are very familiar with finance methods, and what can happen in this field. This is rather different than that of mere accountancy. Our international attitudes need more effort and different skills and capacities, which can deal effectively with different cultures.

The 6-Sigma Program

Opportunities for success are equal for

men and women.

Striking a balance between work and

personal life is the key to success.


Q. Would you shed more light on development projects at PIC?

A. PIC is the leader in applying the 6 Sigma Program in the oil sector, and in Kuwait. We have almost completed training of the project’s staff. The fruits of one of the projects have been already achieved: we managed to save one million dollars annually and soon we shall celebrate our success.

The 6 Sigma Program means that the culture of development have prevailed among our workforce team as it is our final goal in the oil sector in addition to the re-organization process, that is, dividing the company into three main sectors which manage activities and other related support sectors as we move forward to develop the Olefins project, aromatics and fertilizers.

Each sector has its own specialists. Therefore the staff managing the Olefins project is fully aware of all related marketing issues and establishing projects in- and-out of Kuwait besides the follow-up of the partner companies in the same field. Therefore the re-organization process made it easy to concentrate on the work. We set up a strategy to develop Olefins and aromatics inside and outside Kuwait.

A big project with Dow Chemical has recently been announced; now, we are completing the negotiations, which are expected to close the last quarter of 2008 in addition to the Olefins 3 announced by Saad Al-Shuwaib recently, which is under preliminary considerations. I would like to mention that all PIC projects are near completion with production scheduled to start the last quarter of 2008 and the first quarter of 2009.

Behind each great woman is a supportive

understanding husband.


Risk ManagementAn Extensive Method with a Promising Strategy


Al-Mutairi: “The project aims

to achieve the company`s

ambitions in various activities.”

What is Risk Management as a system?

Risk management is an ex-tensive system and organized method that determines, classifies, and assesses all risks (accidents, financial, and in-dustrial) following certain steps. This particular Risk Management project is fo-cused on designing and ap-plying this method at the Kuwait National Petroleum Company (KNPC) to pro-tect as well as boost the com-pany’s assets.

This extensive strategic project on risk management was launched by KNPC on 9 December, 2007.

According to Mohammed Ghazi Al-Mutairi, DMD, Abdullah Port Refinery and sponsor of the project, «the Risk Management project aims to achieve the compa-ny’s ambitions in accordance with a wide range of risk man-agement approaches to cover all KNPC activities.” Al-Mutairi added: “This project is one of the most important projects that KNPC has un-

dertaken because of the urgent need to classify and assess all kinds of future risks that the com-pany may be exposed to. The project is also impor-tant because it puts current risks in a special category to reduce or avoid results of these risks. To this end, KNPC cre-ated a special team headed by Basil Al-Naqi, Perform-ance Improvement Group and representatives/con-sultants from International Accenture Company”.


Practical steps undertaken

“The team formed three committees for this project, that is, the team commit-tee itself, the committee for conducting risk assessments, and the higher committee,” said Al-Naqi, who went on to explain that “the first step was to organize a workshop where participants exchanged opinions and experiences, and familiarized themselves with administrative concepts and terms plus required measures and most relevant practices.”

During this first meeting, the team outlined a schedule,

method and future activi-ties. “The team completed all required interviews as well as statistics for assessing the current risks”, remarked Ousama Shammas, Man-ager, Functional Excellence Group, who added that “the team followed proper pro-cedures in order to carry

Mohammed Ghazi Al-Mutairi

DMD, Project Sponsor

Basil Al-Naqi

Systems and Project Coordinator,

Project Director

Ousama Shammas

Manager, Functional Excellence Group

Shammas:“Added value

will improve the efficiency of

the company`s management.”

Avoiding risks is the project's main

objective.


out the method at KNPC.” Shammas is expected to fin-ish the design phase no lat-er than early June in order to start with the execution phases. He then turned to a brief discussion of the ben-efits of the project for em-ployees and people working in the field. Shammas con-firmed: “The project will send reports to concerned authorities as well as make recommendations to prevent or avoid risks”.

He added: “On the one hand, the expected risk record com-bined with the main

vantage of the detailed risk classifications and risk reports give officials the opportunity to recognize the risk points in the company.”

Mohammed Al-Mutairi con-cluded: “The extensive sys-tem for risk management (ERM) will improve the company’s efficiency in the face of an increasing number of risks. It will improve the income, boost the decision-making process, and support KNPC’s strategy”. Al-Naqi agreed, saying that “ERM is able to improve operational efficiency at the KNPC.”

risks are expected final out-comes that enable us to clas-sify these risks into subcate-gories and standardize them to help us assess the entire effect of these risks while we assess the probabilities of re-currence. On the other hand we can make a report for risks and its classifications for each strategic unit.” Shammas ex-plained further that “the ad-

Al-Naqi: “All company

departments take part in the project.”

The project helps to manage risks facing

the company.


A Peerless Success Story in Kuwait

KPC’s exploration arm at the international level is the only Arab Gulf company with integrated operations in global exploration, development, and production in more than 14 countries worldwide.

KUFPEC

Fahed Salem Al-Ajmi: “The guiding impulse for KUFPEC comes from support provided by KPC, the mother company.”


Since its establishment in 1981, KUFPEC has been responsible for carrying out external explora-tion and production operations representing the State of Kuwait and KPC. KUFPEC’s record continues to combine the highest patriotic commitment and dis-tinguished professionalism along with administrative and technical superiority. Moreover the respect and confidence for KUFPEC as a reliable and qualified partner were easily obtained from inter-national exploration and oil pro-duction communities.

The main objective for establish-ing KUFPEC was to act as KPC’s outer support for international projects. Throughout its 25 years of experience, KUFPEC has con-tributed directly to supporting Kuwait’s international explora-tion interests as well as fulfilling the role of transfering technolo-gies, knowledge and technical skills from abroad.

Expansion and Continuous Growth

Currently KUFPEK is managing more than 52 exploration, devel-opment and production projects in more than 14 countries around the world including Malaysia, Indonesia, Pakistan, Yemen, Qatar, Syria, Australia, China, Philippines, Tunisia, Egypt, Cote d’Ivoire, Sudan, and Mauritania. KUFPEC’s organizational struc-ture is based on dividing opera-

tions into four major areas, each is supervised by a regional of-fice: (1) South East Asia region; (2) Middle East region: (3) Far East and Australia region; and (4) Africa region.

KUFPEC’s strategy is to expand the exploration, extraction and production scope of its activities around the world. This strategy originated from its flexible and diverse policy supported by in-ternational technical experience which guarantees long-term prof-itability.

KUFPEC’s short-term future goals are to reach 100,000 equivalent barrels of oil of daily production capacity by 2010. This is supported by a basic re-serve of 410 million equivalent barrels of oil while maintaining a long-term average investment profit in addition to achieving an average growth of capi-tal (invested profit) during the next 10

years. Currently KUFPEC pro-duces more than 60,000 equiva-lent barrels daily.

Fahed Salem Al-Ajmi, Chair-man and Managing Director re-marked that “despite the fact that KUFPEC has adopted a bold policy towards major acquisi-tions and partnership agreements in order to complete and support its vital future vital growth plans, KUFPEC avoided investment risks by undertaking projects by itself.

Instead, project partners were carefully chosen as well as highly reputable, skilled international oil companies experienced in direct-ing and operating these projects.

Al-Ajmi clarified KUFPEC’s a c h i e v e m e n t s . “ K U F P E C achieved great success during the past two years leading to an in-tensive phase of unprecedented activity through a series of bold acquisition deals and partner-ships. The most prominent in-clude two new projects to its current asset base, one is a pri-vate contract for oil exploration in Geisum and Tawila West fields

in Egypt where KUFPEC holds a 40 percent share.

Our careful and yet aggressive approach

reinforces our commitment to achieve our strategic

goals.

Fahed Salem Al-Ajmi, Chairman and Managing Director


Moreover, in Indonesia the com-pany succeeded in acquiring a 25 percent share in the Indonesian Banjkah sector. During 2007 KUFPEC acquired a 27 percent share in CI-102 marine sector on the coast of Cote d’Ivoire, oper-ated by the Edison Company. In the wider context Abdul-Naser Al-Fulaij has been appointed as deputy member delegate for new projects. Al-Fulaij directly supervises expansion plans and strategies including revisions as well as projects and investment opportunities.”

Workforce Capabilities: The Key to Success

As for capacities and opera-tional competency, Al-Ajmi be-lieves that “a skilled well-trained multinational workforce work-

ing in the international level at KUFPEC is a non-negotiable priority.” He confirmed that “this workforce constitutes, as far as KUFPEC is concerned, the most important component for ensuring the best and most suc-cessful execution of its competi-tive strategy. In this regard, the company continues to focus on bringing together training, pro-grams, tools, and appropriate resources to support employees with ‘the best of the best’ ensur-ing success in the future.”

Future Horizons

About the future, Al-Ajmi clari-fied that “KUFPEC derives its strength and energy from the continued support it receives from KPC, the mother company. KUFPEC tries to benefit from KPC’s position and reputation as it considered to be among the pioneer oil establishments at the

international level. KUFPEC re-lies on potential opportunities which will be available for refin-ing and investment projects; in other words KPC is willing to be part of these kinds of centures in many conuntries especially Vietnam.”

“Furthermore, it is rich in prom-ising exploration opportunities such as negotiations on joint exploration projects with the Petrovietnam Company, which are currently on track,” com-mented Al-Ajmi. “Many other projects in different countries around the world such as India and China should also be men-tioned.”

Pointing out the challenges KUFPEC faces regarding its ex-pansion plans, Al-Ajmi confirmed that “the company along with its peers are working within this very competitive-based industry. Thus KUFPEC is also affected


by variations witnessed by the oil industry and the international marketplace. This becomes more severe with the growth of part-nership operations among major companies, the continuing fluc-tuations in the rate of oil, the increased cost of exploration, de-velopment, and production op-erations along with rising inter-national competition in addition to increased demand for skills and technical expertise.

Social Commitments

As KUFPEC continues to grow, it places great importance on carrying out its responsibilities, in health, security, and environ-mental issues. KUFPEC’s vision is based on gaining the trust of its employees, partners, KPC share-holders and the host societies. KUFPEC has never lost a sight of nor spared any effort to sus-tain it’s highest values as well as fundamental principles through programs and initiatives designed to establish mutual benefits with host societies. KUFPEC’s valu-able contribution expanded dur-ing the past few years in the con-struction of roads, schools, water wells, mosques and medical es-tablishments along with other utilities.

Within this framework, KUFPEC’s diverse projects and initiatives contribute towards campaigns to fight drugs organized by the National Addiction Project, the environment initiative of the Kuwait Diving Team, the rebuild-ing of Paula’s schools in Syram Indonesia and its contribution to build schools and mosques in Yemen and Tunisia. Moreover, KUFPEC assists in job creation opportunities for native citizens in host societies. Several years ago, KUFPEC donated major cash donations for the relief of Tsunami victims. KUFPEC has also made diverse contributions to support sports, education and social activities in Arab and for-eign countries.


E-Portal New Achievement for Oil SectorIntegrated Information for Oil Sector EmployeesOne of the Most Important Objectives

Waleed Al-BabtainManager, KPC Computer Infor-

mation System Department


The Steering Committee of Information Technology at the Oil Sector, which includes representatives of the Corporation and its subsidiaries will soon launch a new e-portal called Ku-wait Oil Gate (KOG). The new e-portal once launched will bring together new technologies and information with long-term benefits for the entire corporation, which to be added to a series of distinctive pioneering achievements for a corpora-tion with a worldwide reputation in the energy sector.

To shed more light on the KOG project, KPC World magazine talked with Waleed Al-Babtain, Manager, KPC Computer Information Sys-tems Department who pro-vided an overview on how the idea originally began. “Nota-bly, KPC and its subsidiaries have adopted the principles of quality and technology in all its activities. It emphasized com-prehensive integration using the latest developments in sci-ence and technology informa-tion systems while, at the same time, achieving optimum utili-zation of databases and knowl-edge exchange between KPC and its subsidiaries.”

Al-Babtain remarked: “KPC continues to focus on human resources and performance to raise the technical grade levels which achieves the desired ob-jectives. So we developed the slogan ‘Move towards the top and strive to achieve leadership in all areas’, and it was out of this concept that we developed the idea to connect the oil sec-tor institutions together with an electronic site that allows for the consolidation of a large quantity of information from the oil companies and its sub-sidiaries.”

Regarding these objectives to launch a unified portal for the oil sector, Al-Babtain contin-ued: “There were many objec-tives: foremost was dissemi-nating electronic education among the employees at the oil sector and facilitating the flow of information between them in addition to improving functional procedures between KPC and its subsidiaries. Other


nouncements as well as emails and other issues related to communication between sec-tor members. The continuing need for communication be-tween oil companies in addi-tion to other projects such as the unified network contrib-uted to the creation of this im-portant e-portal project.”

Ibrahim elaborated on how many of the stages developed. “After defining our goals and how to highlight the theme, that is its relevance and use-fulness, the implementation phase will soon begin. Special-ized teams were formed to pre-pare the tender, together with the evaluation and selection

Ibrahim, Consultant CIS De-partment. “First of all,” Ibra-him said, “we must applaud the support and encouragement of KPC Senior Management. Eversince the idea first took form, and after several discus-sions and consultations, we sustained a high level of enthu-siasm and directives to acceler-ate the implementation of the project. A mere idea on paper was turned into reality to ben-efit thousands of oil sector em-ployees and to be added to the record of KPC achievements in the petroleum industry.”

Ibrahim continued: “Senior Management believed in en-hancing communication be-tween the members of the oil family together with building an infrastructure for initiatives such as the Enterprise Risk Management Health, Safety and Environment policies and the Best Practice policy.

There was a combined urgency to launch the KOG project, which will help resolve many of the difficulties we are fac-ing such as delivering unified information to sector employ-ees. Information will include important circulars and an-

objectives included the upgrad-ing of professionalism, the essential objective for KPC Senior Management, contrib-uting to the exchange of ex-pertise among all oil sector employees as well as including the employee personal data system.”

KOG Services

Al-Babtain commented on KOG services. “The site will contain many useful applica-tions such as Petroleum Train-ing Centre’s (PTC) database where employees can access in-tegrated information on availa-ble training courses, their dates and future sessions. KOG also provides a link for the Special Funds System Applications of the oil sector so that staff can follow-up on their subscrip-tions in the insurance fund. The KOG site provides a link to Ahmadi Hospital which updates employees on family medical examinations. In addi-tion, the site provides a media communication service from the Kuwaiti News Agency (KUNA).”

For more information about the stages of the KOG project and its qualitative leap in IT, KPC World met with Khaleel


Khaleel Ibrahim, Consultant CIS Department, Ibrahim of-fered some final remarks: “The website will succeed only if eve-ryone working together in the oil sector continues to cooper-ate with the site supervisors. We call on everyone to contribute to the on-going development of this e-portal project. We look forward to people offer-ing opinions and suggestions that will contribute positively to communication. We want people to provide fresh inter-esting articles that will help to renew and develop the site continuously especially for oil sector employees.”

the unified network. “Moreo-ver, a working group repre-senting KPC and chaired by Tayseer Al-Hamad was formed by the Information Technology Commission in the oil sector to link oil companies to the unified network. The working group achieved distinguished perform-ance. Sheikha Al-Tourah in the Media Relations Department was responsible for circulating the e-portal site and develop-ing the accompanying media campaign for its release.”

At the end of the conversa-tion between KPC World and

of appropriate companies who would implement the project. These preliminary steps were undertaken through the In-formation Computer Systems Department together with the participation of specialized teams from the oil companies themselves.

These important steps will be followed by the actual imple-mentation phase: high-level programers were selected sup-ported by Abdul Aziz Sultan, Nasser Al-Qadeeri, Dhirendra Kumar, Abdulatif Abdullah, and Nada Shister who formed the team. Salah Al-Omran is responsible for managing the final e-portal site and its devel-opment.”

Ibrahim explained on how the Information Technology Commission was linked to

“e-portal”

team work


The oil sector complex was inaugurated in a distinctive ceremony on February 5 2008, attended by a crowd of sector’s leaders, MPs, am-bassadors, members of the diplomatic corps, in addition to a large number of high dignitaries.

The architectural edifice was built according to the latest architecture systems, which provide an ideal working en-vironment for the hundreds of oil sector employees. This explains practically the slogan raised by the KPC (Perform-ance through Integration).

1995 was the beginning of the story of constructing the

oil sector complex that in-cludes the KPC and the Min-istry of Oil. By this year the KPC had chosen the location of the old Salt and Chlorine Factory in a corner between Shuwaikh and Kuwait City, and then the KPC invited tenders for construction.

In 1997, the currant build-ing’s design was chosen after many options were offered. The building symbolizes two opposite boats and an oval corridor in the center.

In 1998, the construction process began on 57.000

An Artistic Masterpiece and a Symbol of Sector March

Oil Complex A New Perspective for Brighter Future

The biggest plasma screen in Kuwait

is found in the Oil Complex


square meters, and it took a long time after cleaning the contaminated area of the mercury deposits resulting from the salt and chlorine factory previously.

The cleaning of the bottom of the sea was carried out in cooperation with Environ-ment Public Authority, and the project was finished suc-cessfully after 7 years of hard working.

In December 2005, the con-struction was completed to form an artistic masterpiece, and a landmark that belongs to the State of Kuwait’s prop-erties.

An Artistic Edifice

The complex consists of two towers one of them is for the Ministry of Oil consists of 15 floors, and the other tower consists of 19 floors and it is for the KPC, where the height of the oval nucleus that links the twin towers is 110 meters.

The car’s passage leads to the building’s arched entrance, where visitors can see charm-ing landscape through the passage.

One of the distinctive fea-tures is the car parking which

looks like boats that sale to-gether, when the visitor see it from a distance.

The entrances include cir-cular glass doors leading to curved corridors which are connected to a semi-glass lobby provided with one of the hugest plasma screens in Kuwait.

In the same level, there is a conference room that holds 75 people with acrylic voice system, glass meeting room that holds 146 people; each seat is provided with high quality voice facilities. The reception leads to a corridor provided with 6 elevators.

In the first floor, there is an ideal area for exhibitions, and every floor includes a reception hall in the form of ship, and is equipped with special chamber of smokers, not to mention the clinics,

pharmacy, reading and train-ing room, prayer rooms hold 183 men and 83 women, and operating room.

If there is any need to evac-uate the building, there is room for crisis management that helps the higher man-agement to face all unexpect-ed circumstances.

The building also includes many facilities, like travel agencies, bakery, banking establishments, and a restau-rant.

The 18th floor is provided with conference hall on both sides with all new equipment, and a circular guest room.

The complex encompasses a

conference room equipped with

acrylic surround system

Exhibition area and numerous

reception halls are among the complex

facilities


‘Challenge’ is the magic word that we hear everywhere at PIC, which has made great strides locally, regionally, and interna-tionally. On your first visit to PIC site at Al-Sabahiya, you will hear people comment with such phrases as «Challenge is the name of the current game as well as our next stage», «The challenge has brought about various achievements» or «Chal-lenge is the slogan that we all use.» These are not mere words or phrases but have been trans-lated into real numbers. And as a result, PIC now ranks first place in producing and exporting fer-tilizers around the world. KPC World had the oppor-tunity to interview Jamal Al-AbdulJaleel, Manager, Fer-

Mr. Jihad Al-Hajjy, DMD, Fertilizers, is awarded by USA main Urea exporter


Kuwait Leads The Way In International Fertilizer ProductionJamal Al-AbdulJaleel: "We are proud to belong to PIC."

tilizer Marketing, who revealed details of current achievements in 2007/ 2008 as well as the challenges that each person at PIC staff faced on performance and developing the company. Jamal Al-AbdulJaleel began his interview, saying: “We are proud to be a part of PIC: our attitude has been transformed about where we work.” He noted: “Attitude and achievements go hand-in-hand: they express our recent achievements. We take pride in our work as we belong to a company in the lead-thanks to senior management’s clear vision to become a leader with an international reputation. We would never have reached these new benchmarks unless we ac-cepted the challenge, deter-mined to reach our goals. Eve-ryone at PIC should be proud of our position in the interna-tional marketplace as well as our success in the local market, and abroad.”

6 SigmaHuman Resources has become top priority at PIC. Senior Management believes that peo-ple are the real powerhouse of the company. And to that end, PIC has developed a series of training programs which help employees both at the practi-cal and theoretical level to face future challenges. One of these

programs is 6 Sigma, which has been used in the company, and we already enjoy its benefits in so many ways. 6 Sigma Project is meant to develop and enrich individu-als with specific tools based on their special distinctive skills, experience and intelligence that can increase PIC returns on any project. In other words, 6 Sigma aims to help each person rediscover themselves through certain technical tools, which are highly developed based on each person’s experience and creativity. It was a great privi-lege to take part. It is my pleasure to announce that the Marketing Department has presented two projects: the first aims to optimize an imme-diate Sales Operations Strategy and the second, conducted by one of our women employ-ees, to decrease the ‘document cycle’ of invoices. Using the 6 Sigma system, this means that the entire 20-day ‘document cycle’, which includes a bank transfer, has now been signifi-cantly reduced to only three days. I also want to mention the role played by Saad Al-Shuwaib, CEO, KPC, along with PIC senior management to bring 6 Sigma here to the company. Al-Shuwaib and senior PIC management saw how this project was used at Dow Chemicals, which is one of the leading petro-chemical companies internationally and how Dow has achieved signifi-cant profits us-ing this system.

Al-Shuwaib was determined to apply the 6 Sigma system under his leadership at PIC. His vision was so effective that the project reaped unexpected profits, and as a result, he ordered all KPC-related companies to begin to use the 6 Sigma model.

Re-Org ProjectJamal Al-AbdulJaleel explained how the Re-Org project works: “PIC has depended mainly upon fertilizers (urea-ammonia) but future expectations included expansion in the field of petro-chemicals. The Olefins 1 project started under the leadership of EQUATE Company. Currently, the final stage for the Aromatic Project and the Olefins2 is un-derway; these new projects to-gether with future expansion strategies required changes. The Re-Org Project with its adopted programs and systems devel-oped three units each led by a

2007/2008 is the ‘Year of Challenge’, yet we passed with

unprecedented success

Jamal Al-AbdulJaleel,Marketing Director


Unexpected economic returns.

Vice-Managing Director, and three departments related to marketing, operations, and de-velopment. KPC has approved the re-construction project. This project plan impacts posi-tively on our operations, in-ternational reputation and the trust of our clients on the Kuwaiti product. We are com-mitted to our product quality and efficiency in shipment de-livery to our clients.”

On his return from his Far East trip, Saad Al-Shuwaib was quot-ed as saying “I was very content with PIC’s high reputation among everyone I met. Many Chairmen, customers and offi-cials in the different countries I visited all expressed their admi-

ration, thanks to PIC’s interna-tional reputation.” Jamal Al-AbdulJaleel contin-ued: “We are proud of our achievements and the increased demand for Kuwait’s products as it reflects our commitment to the company and the qual-ity of our service to custom-ers. I am proud to announce through KPC World that we have received a US delegation representing the main importer of granular urea, which has re-quested an increase to 800,000 tons of urea annually. Competi-tion from China in this field re-mains high yet our reputation, dedication and commitment to our customers is the secret of our success.” International Petrochemical IndustryYou mentioned PIC local achievements but what about abroad?“PIC has achieved a wide range of international achievements in long-term contracts with customers as well as immedi-ate contracts. The profit mar-gin has increased in our long-term contracts from $9-11 dollars per ton. We have achieved very high economic returns for 2007/2008, in ad-dition to signing contracts with new clients in India, for exam-

ple. Despite brisk competition from China we have managed to attract new customers in the Australian marketplace. New contracts included the USA, Australia, India and Thailand. Our presence in Asia has helped us become a leading exporter of granular urea in the Gulf re-gion.”How do you calculate the profit margin in long-term contracts considering the variables in the international oil markets?“Oil market variables do not directly effect the fertilizer mar-ket. The effects are immediate. Increased prices of granular urea from US$180 to $400 resulted from a declaration by the US president who intends to search for alternatives energy sources and in this regard stated the ne-

Exporting 953,000 tons of loose urea through Shuaiba

Port is the highest to date.

Jamal Al-AbdulJaleel: “KD46 million in fertilizer sales is

the highest record ever achieved by the

company.”

1,700,000 tons of urea and 150,000 tons of ammonia

annually.


cessity to use ethanol in-stead of benzene. Ethanol is produced from corn; consequently, farmers be-gan to cultivate thousands of acres of corn. The de-mand for urea increased and so prices soared. Our exports to USA rose from about 500,000 tons annually to 800,000 tons annually.” You discussed achievements but would you discuss obsta-cles and challenges? “When we state that 2007/2008 was the ‘Year of Challenges’, we are not exaggerating. It is the truth. For example, during May 2007, KPC sent us an official letter requesting to decrease the amount of gas used in granular urea production. We were in a very difficult situation. ‘How

to fulfill our international com-mitments?’ Senior management and the legal department met to review the company’s legal po-sition towards long-term con-tracts. There was even a sugges-

tion to breach current contracts. Real concerns covered the in-ternational marketplace. Yet the urgent question was what could PIC do? We met con-tinuously with top management and through teamwork (agree-ment with teams formed by Mohammed Hussein, Vice- Managing Director, Manufac-turing, we developed a workable plan to keep our international position and reputation intact along together with our con-tinued contract commitment with customers. Success reflects our achievements, the highest return ever achieved of KD460 million for urea fertilizer sales

and the export of 953,000 tons, based on sen-

ior management’s vision along

with our team work.”

A crisis could have stopped our produc-tion yet determina-tion, will power and dedication were the keys to our success.


KNPC Olefins 2 Project Brings

Major Economic Benefits

Distinctive Project to Draw 135 Million Standard Feet of Ethane Gas at Liquefaction Units

KNPC decided to increase the production capacity of its ethyl-ene factory by establishing a sec-ond phase Olefins 2 Project to integrate refining and gas process-ing, and the petrochemical sector in the context of increasing glo-bal demand for ethylene and its derivatives. In September 1997, ethane (which was produced by the gas draft and used as a feed element for the Olefins 1 Project with a production capacity of 120 metric tons per day) was used as a critical element in the integration of the Mina Ahmadi Harbor Refinery and the wider petrochemical industry. The State of Kuwait, in turn, became a major producer of petrochemi-cals (ethylene and its derivatives such as polyethylene of low and high density as well as ethylene oxide and ethylene glycol, etc.). As a result, KNPC increased its profitability at the Mina Ahmadi refinery as well as the national in-come of the State of Kuwait.

There continues to be an increas-ing global demand for ethylene and its derivatives, and within that context in cooperation with the wider chemical industry, KNPC has focused on increas-

ing production capacity of the ethylene plant by establishing a second phase in the Olefins 2 Project. At the same time, the Kuwait National Petroleum Company Study revealed that there were several ways to in-crease ethane gas production (which costs less than other al-ternatives) by expanding the gas project itself, creating new units using modern refrigeration tech-nology for the first time. They can draw the largest possible amount of ethane as feedstock for the petrochemical industry (ethylene and its derivatives) by using these new technologies. The unit will be operational in the second half of 2008 with expected produc-tion of 340 million cubic feet per day of ethane (approximately) to be used as feedstock for the Olefins 2 Project

The refinery needs for the project

Using low-value products, the Olefins 2 Project can be summed up in the creation and develop-ment of a new unit to increase extraction and production of ethane gases, (which results from the manufacturing process itself in the gas liquefaction units, the

absorption and extraction tow-ers) to be used as a fuel to meet current and future requirements outlined in the KNPC Olefins 2 draft. It is expected that the new unit will provide the Ole-fins 2 Project with 135 million standard feet of ethane daily (approximately).

In designing the unit, the latest techniques in liquefaction and manufacturing of gas has been implemented to enhance extrac-tion proportion of ethane. Heat bounced from manufacturing processes is applied in this place to generate steam.

Ethane and its uses

Gases associated with oil pro-duction change depending on the seasons. For exam-ple, gases containing different hydrocarbon gases in methane, ethane, propane and pentane in addition to unwanted materials such as sulphuric materials and carbon dioxide in different pro-portions change depending on weather conditions in summer and winter.

Methane and ethane alone form 90 percent of these gases. It is commonly known that KNPC


use both ethane and methane as a fuel in the refineries and in producing electricity for the Ministry of Electricity and Wa-ter. Ethane is considered as a high-value feedstock for the pet-rochemical industry so ethane is currently extracted at the gas plant that produces ethylene and its derivatives (polyethylene low- and high-density ethylene oxide and ethylene global, etc) at KNPC. Propane and butane gases are also drawn and lique-fied at the plant to be sold as pe-troleum liquefied gases. Interest-ingly, high-density polyethylene is used in the pipeline industry (which requires relatively high pressure) and in the bottling in-dustry with its different require-ments. Low-density polyethylene is used in the pen industry and in the industrial production of pro-tective layers for electrical cables and wires.

Project Impact: Economic, Employment Opportunities and Environment

The development of a new ethane project unit to extract ethane has large economic implications because of the difference in the price of ethane. Ethane is used, on the one hand, as a fuel for the furnaces and on the other hand as a feedstock for the petrochem-ical industry and the production of high-value products. The im-pact of the project includes job opportunities for Kuwaiti young people. The Olefins 2 Project not only has long-term eco-nomic and job creation impact but also positive environmental implications. The project leads to a reduction in the propor-tion of hydrogen in the fire gas (methane) used as fuel in re-fineries and energy production units, thus reducing emissions of major oxides permitted by Environment Public Authority (EPA).

Modern refrigeration technology used for

the first time



A special report on the Austral-ian marketplace revealed that Riotento Alcan, one of KPC oldest and most important cli-ents, is considering the use of natural gas to generate electric-ity for operating its aluminum factories instead of Kuwaiti fuel oil. A delegation from the Inter-national Marketing Sector visited Australia to find out first-hand about Riotento Alcan plans for the next phase, and to discuss the

long term contract. Mohammed Al-Qalaf, Coordinator of Special Products and Fuel Oil Sales De-partment, headed a delegation representing six departments of the International Marketing Sec-tor, to discuss the KPC fuel oil contract for 2009. Formation of the group of delegates was based on the directives of Managing Director, International Market-ing, who stressed the importance of working with the largest num-

bers of departments responsible for follow-up on different KPC contracts.

Many excellent, positive resulted from the Australian trip.

KPC World met with Al-Qalaf to talk about the visit. Al-Qalaf said that “a contract signed with the Australian Riotento Alcan Com-pany is one of the oldest con-tracts in the Australian market”.

Mohammed Al-Qalaf: “Field trips are crucial for enhancing relationships with our clients.”


He continued: “The contract has been signed in 1970s by KOC to provide Riotento Alcan Compa-ny with needed fuel oil in order to generate electricity to operate its aluminum factories. Three decades later, KPC continued to be the only main supplier to Rio-tento, which recently considered replacing the old system of fuel oil with a new gas system. This meant a real financial loss for us, and the end of a long fruitful re-lationship. It was decided that we would review and closely follow-up on this particular contract.”

“After holding fruitful meet-ings with our Australian partners, we discovered that a feasibility study - to replace natural gas in-stead of using Kuwait oil fuel - was cancelled. Clearly, the compa-ny’s management has decided to continue to depend on KPC as a main supplier of their oil fuel needs. This decision was based on economic studies, which re-vealed the high economic ex-pense of using natural gas instead of fuel oil,” Al-Qalaf said.

Furthermore he said: “Field visits are of great importance as they provide us with a close overview of the current marketplace as well as client’s fu-ture plans. Our Aus-tralian visit is a good example where we acquired new infor-mation especially in the area of Safety, Health, and Environ-mental domain. In this context, we have reviewed the com-pany’s safety proce-dures after complet-ing a short test on HSE; it reflects the significance that the company is commit-ted to concerning the highest standards of safety to all its op-erations. We have direct knowl-edge of the ways of using fuel oil in generating electricity as well as different activities of the fac-tory.”

Challenges faced the KPC del-egation during its visit to Aus-tralia. Al-Qalaf remarked: “On a business level, we experienced a positive relationship during

We are proud of our partnership with Riotento Alcan


our meetings with Riotento Alcan representatives. About the Australian journey itself, it was a challenge even to get there. First, there were no available direct flights to the city of Brisbane, the headquarters of the Alcan Com-pany and its factory at Gove. We spent 40 hours to reach our first destination . After the meetings, our delegation visited the city of Gove to see the factory first- hand, and to review different ways of using Kuwait oil fuel.

The real surprise came when we discovered exactly where Gove City was located—in a remote area inhabited by Australian abo-rigines still rooted in their origi-nal way of life, which has no link with today’s civilization. They know nothing about comfort or entertainment. Our KPC team had to adapt to a new lifestyle and the unexpected challenges in terms of finding appropriate accommodation. There were no 5-Star hotels, yet everyone was very flexible—some lived in a hostel related to the company and others lived at a half-star hotel (according to international standards).”

Al-Qalaf added: “One of the exciting characteristics of Gove is that it is considered to be the largest natural protector-ate for crocodiles: it is located amidst the jungle, full of wild animals. Our journey was a sa-fari adventure into the heart of Australia. We experienced some once-in-a-lifetime situations that


left us with unforgettable memo-ries, for example, we visited what we thought was one of the most beautiful beaches at Gove until we discovered that it was full of some of the largest crocodiles in the world.”

“Our visit to Australia was a complete success: it gave us new insights and experiences, and helped us to closely get a first-hand overview of the Australian marketplace,” Al-Oalaf conclud-ed by saying. “We managed to strengthen our relationship with our clients, and to establish new relationships that have greatly benefited our business. This trip also enhanced our relation-ship with our colleagues, helping bring us together as a ‘one unified family’, which will optimize work performance among international marketing sector employees.”

The Australian KPC delegation consisted of Hayam Al-Ibrahim, Organizing Sales Department, Wael Al-Khodar, Special Prod-ucts and Fuel Oil Product Sales Department, Yonis Ashkanani, Provision Department, Mashari Al-Rashidi, Special Products and Fuel Product Sales Depart-ment, Emad Al-Ansari, Marine Department, and Jaber Al-Hejji, Marketing Research Depart-ment.

“Team spirit and great enthusiasm marked the

journey.”

Risk Assessment The progress of human civilization is fraught with risk, and these risks can vary depending on how we understand them and deal with them properly. The Industrial Revolution with its modern approach to mechanization has helped increase human rights and shortened how long it takes to make many objects and achieve many objectives, but this comes with a price, sometimes at the expense of personal safety.

To know more about this topic, KPC World interviewed Hmooud Hamad Al-Ajmi, Process Safety Management Coordinator, who stated that the actual processes of risk assessment often take place in industrial areas, factories and dangerous places. But there are other places, too, such as offices and houses with hidden risks such as inadequate file storage or slippery tile floors.

Our focus is directed towards factory risks by looking at the oil sector for example. When particular procedures are undertaken by the maintenance or operation department in refineries or factories, related risks should also be taken into consideration before beginning to work—this includes predictable risks such as sparks scattering, mechanical risks from heavy equipment, chemical risks from the presence of toxic gases in the workplace, and radiological risks from radiating apparatus along with other kinds of risks.

To carry out risk assess-ment, does it require certain knowledge?

Most people nowadays are aware of inherent risks such as inappro-priate storage of files, slipping on wet tile floors, and other risks that humans can recognize. Regarding risk assessment process in facto-ries or refineries, it is carried out by well-trained, experienced peo-ple, whose expertise is continually upgraded through certification courses with a specified timeline. The Operations or Production Department, and the supervisor or people from qualified safe-ty operations who also at-tend these nec-essary training updates are r e s p o n s i b l e for issuing this permission.

Risks Assessment operations begin by identifying various kinds of risks through apply-ing the following steps:

1. Identify potential risks.

2. Identify the amount of risk and how it happens.

3. Risk analysis and development of procedures to avoid.

4. Taking notes and following through in the application.

5. Review the evaluation process and update, if needed.

Therefore, it is essential for risk assessment to take place which means that ways to eliminate or minimize these risks are always un-der consideration. Risk assessment leads to avoidance and reduction of the rate of injuries as well as the loss of life and property.

Triangular Degree of Risk : Three-tier Criteria for Risk Tolerability (HSE UK-1992)

Triangle shows the degree of se-riousness, the lower and upper limits of risk; this helps to speed

1 in 10.000people

1 in 1 millionper person/yr

Upper Limit

Lower limit


High Risk

Minimum Risk

AcceptableRisk

Hmooud Hamad Al-Ajmi Process Safety Management

Coordinator

understanding about the degree of risk as shown (in Figure annex).

There are multiple risks inherent including:

• chemical, mechanical, electric, radiological and envi-ronmental risks.

The practical application of risk assessment:

Must identify the types of risks expected before any action and process takes place. It is called a Task-Based Approach. There are different techniques used for risk analysis such as:

• Fault Tree Analysis (FTA)

• Event Casual Factors Analysis (ECFA

Through analysis that identifies what elements cause risks and unsatisfactory safety procedures reports are issued with recommendations to eliminate or reduce risk.

The process of evaluation and the classification of risk are associated with two important aspects:

• Likelihood of recurrence (Probability).

• Damage (Severity).

Types of risk:

Individual risks: the falling of a particular person •

Risk group: injuries or death of several people •

Economic risks: the destruction of property and • stopping production

Risk environment: environmental damage •

Work Type

Identifying Risks

Analyzing Risk Rate

Measuring Risk Rate

The Risk Matrix

Likely

Probable

Occasional

Remote

Improbable

AHigh Risk

LIK

ELIH

OO

D (C

HAN

CE)

BMedium Risk

CLow Risk

Minor Major Severe Catastrophic

Risk assessment process

Risk Analysis

Risk assessment

Finally, full commitment combined with work safety procedures following these actions avoid accidents and injuries, and reduce loss.

Risk Accepting or Rejecting

The Applied Procedures


KPC Strives to Becomea Regional Leader in Health, Safety and Environment

Submit press releases, news items, story ideas, attendance at conferences and symposia, reports on visiting dignitaries and letters to the Editorial Team at the Media Relations Department. Reproduction in any form is prohibited without prior written permission from the Editor in Chief of KPC World.

P.O. Box: 26565, 13126 Safat, Kuwait - Fax: 499 4991Email: [email protected] - www.kpc.com.kw

quarterly magazine, issue no. 44, april 2008managing the environmental, health, and safety aspects...

Documents