United Oil Projects Company (UOP), which posted a net profit of KD1.362 million ($5.1 million) in 2007, a 125 per cent increase over the previous year, has said it will continue looking for new opportunities and enter into local, regional and international partnerships with specialist firms in the energy sector.

It will also seek improved margins in its chemical division and develop new products to cover the external market, it said
UOP is an oil, gas and petrochemical investment company whose main shareholder is the United Industries Co (UIC) of the Kipco group which holds 40 per cent of the shares. Major investment groups hold 8 per cent of the shareholding.
While not directly producing goods, it is engaged nevertheless in a number of strategic shareholdings and joint ventures that provide goods and services to the local Kuwait and GCC energy sectors.
Direct production is accomplished by Kuwait Chemical Manufacturing Company (KCMC), which is fully owned by UOP. Other UOP subsidiaries are United Precision Drilling Company (UPDC), Al Khorayef and United Carbon Projects Company.
UOP registered revenues in 2007 of KD3.26 million against KD2.98 million in 2006. Income from UPDC was KD292,000 against KD124,000 in the previous year. Income from Al-Khorayef was not recorded in the annual statement.
Other income was KD120,000 compared with KD57,000 in 2006.

KCMC
KCMC specialises in the production and marketing of synthetic resins, (alkyds, polyesters and emulsions) and in the trading and production of various chemicals. The ISO 9001 plant situated in the Mina Abdullah industrial area has a production capacity of 10,000 tonnes per year and stands on a 29,000, sq m plot. It is described as one of the most modern and self-contained plants of its type in the Middle East and its products are well accepted by multinationals including those in the paint business.
UOP’S technology partner Synthesia Espanola is a long-established independent European company whose strategy of involvement in R&D has produced first class products for the building and industrial markets.
Traditionally, KCMC products have included polyester resins for the glass reinforced plastics’ market and alkyd resins for use in coatings.  Over the last 18 months KCMC has further expanded its product range to include specialty resins for the coatings and inks markets with the intention of making the Gulf region as independent as possible for all resin requirements.
Over the years it has licensed technology from various overseas companies but now has sufficient local expertise to develop resins that are both competitive with international technology and quality, whilst matching specific individual customer requirements.
KCMC products are provided to markets in the GCC region, Iraq, Egypt, Lebanon and Syria.
“Many of the raw materials utilised in our production processes are downstream products of the petrochemical industry. Recent increases in crude oil prices coupled with record prices of natural oils, which also form part of our feedstock, have placed tremendous upward pressures on finished product costs,” said UOP general manager James Hodgson.
“Prices within the Gulf and Middle East for commodity products within this industry segment are amongst the lowest in the world. The multiplicity of local producers of these commodity resins and increased raw material costs has sometimes resulted in a failure to maintain adequate returns. KCMC has thus taken the conscious decision to evaluate alternative markets and alter its’ product mix to accommodate them.”
Hodgson said efforts were being made to increase sales in export markets through the introduction of niche products, attendance in trade shows and membership in internationally recognised organisations that support the products that are produced.
The official said some of the new resin and alkyd products would be shipped to the EEC in the coming months. “As these products gain acceptance and demand increases for the top-quality products that KCMC can provide, plant expansion will be considered,” said the official.

United Precision Drilling Company
It was formed in 2006 by United Oil Projects (35 per cent), United Industries Company (12.5 per cent) and Precision Drilling International. The company is headquartered at Ahmadi and undertakes oil and gas well drilling on a contract basis for the Kuwait Oil Company and other international oil companies.
UPDC entered into various management contracts with Precision with respect to the day-to-day running of its activities on an arm’s length commercial basis. The designated area of operation of UPDC includes onshore and offshore territories in Kuwait and the Kuwait-Saudi Arabia partitioned neutral zone.
The company owns and runs eight drilling rigs with Kuwait Oil Company and one rig with Joint-Operations. The main objective of UPDC is to build the largest, most technically qualified and best regarded contract drilling organisation in Kuwait.

Al-Khorayef
Al-Khorayef Company for Sale, Maintenance and Repair of Oil Production Equipment WLL (Kuwait) was incorporated in 1998 as a part Al-Khorayef Commercial of Saudi Arabia. It offers pumping services to the state-owned Kuwait Oil Company, Joint Operation in Wafra and Ministry of Electricity and Water. Al-Khorayef is specialised in the supply of electrical submersible pumps (ESP) for both water and oil applications.
In early 2007, UOP along with United Industries Company acquired major shares in Al-Khorayef Kuwait.  The objective behind the acquisition was to utilise UOP and UIC local influence and financial strength in expanding the business of the company.
Al-Khorayef (Kuwait) is expanding its operations to include the recovery of heavy oil. In the beginning of 2008, it was awarded a contract by KOC to implement the lower Fars pilot project (LFPP) to produce Kuwait’s first heavy oil with sand from the northern Ratqa field.

United Carbon Projects Company
It is a newly established subsidiary specialised in technical and economic consultancies to reduce the gas emissions and benefit from clean development mechanism and the Kyoto projects.
“Through UOP’s involvement in Al Khorayef and United Precision Drilling Co we have been involved in the drilling of production wells for KOC and in water and oil pumping services,” said Hodgson.
Commenting on the challenges UOP faced, he said: “As part of the oil and gas services business, the company faces many challenges as the national oil companies in the GCC region strive to maintain and increase oil and gas production from aging fields. New technologies will be required to efficiently and cost effectively maintain product and achieve the targets set by the companies. We view the prospects for UOP to be very good in the near term and continue to look positive.”