KUALA LUMPUR: As the price of oil heads for its 10th weekly drop since October, Kuwait Oil Company (KOC), a subsidiary of Kuwait’s national oil firm Kuwait Petroleum Corp (KPC), is nevertheless maintaining its production capacity, said KOC team leader strategic planning Ali Ameen.

KOC is the Kuwait government’s exploration and production arm.

“KOC is not concerned about the oil price because our commitment to the government is the capacity and production levels. We are pushing the [production] capacity by next December to 3.16 million barrels per day [bpd], even though the price is falling.

“We are building our production capacity and bringing the capacity ahead of time,” said Ameen on the sidelines of the International Petroleum Technology Conference here last week.

He said the capacity expansion was to meet Kuwait’s aim to raise its output to four million bpd by 2020, of which KOC would be responsible to produce 3.65 million bpd.

The remaining 350,000 bpd comes from another government company in the petroleum sector, Kuwait Gulf Oil Company, which is a partnership of Saudi Arabia and the southern part of Kuwait.

It has been reported that Kuwait is offering Asian buyers the largest discount for its crude oil in six years, joining Saudi Arabia, Iraq and Iran in cutting prices. Saudi Arabia, the world’s biggest oil producer, has reduced its official selling prices to Asia and the United States on Dec 4, after the Organisation of the Petroleum Exporting Countries (Opec) decided last month to maintain production.

KPC will sell its crude at US$3.95 (RM13.78) a barrel below the regional benchmarks next month, reported Bloomberg, quoting the national oil firm. The report also noted that this is the biggest discount since December 2008.

“Today, we [Kuwait] have around three million bpd capacity. Kuwait’s [earlier] production capacity is to reach 3.15 million bpd by 2015, of which we (KOC) are committed, and 3.65 million bpd by 2020.” he said.

KOC’s chief executive officer Hashim Hashim had in March said Kuwait, which pumps around three million bpd, could “increase production depending on market conditions”.

When asked if storage could be one of its challenges moving forward, Ameen said: “No, we have plenty... we have 30 million barrels of oil storage place and we can store oil for seven days.

 He said this is because KOC is financed by the Kuwaiti government and has the ability to absorb the shortfall from current oil prices and even future price drops.

This article first appeared in The Edge Financial Daily, on December 15, 2014.