Located in the Middle East region that contains 75 per cent of the world's oil reserves, Kuwait has great petroleum resources. Today it is one of the long-term major oil producers with the fourth largest oil reserves in the world.
The origins of Kuwait’s oil industry date back to the 1920s. In 1921, Sheikh Ahmad Al-Jaber Al-Sabah became Ruler of the State of Kuwait. He was well aware of the activities of oil prospectors in neighbouring Bahrain, Saudi Arabia and Iraq, as well as the Anglo-Persian Oil Company’s success in southern Iran. Kuwait's main industry, pearl diving, was under threat from the cultured pearl industry and it was hoped that the strange black patches of a rough bituminous substance found in the desert indicated underground reservoirs of oil that would revitalise Kuwait’s industry. Expectations were further raised by the discovery of oil in Bahrain in 1932.
In December 1934, Sheikh Ahmad Al-Jaber Al-Sabah formally granted the first Kuwait oil concession to Kuwait Oil Company Limited, which was formed by the Gulf Oil Corporation (now Chevron) and the Anglo-Persian Oil Company (now BP).
Technical reports highlighted the potential of Burgan, located in the desert in south eastern Kuwait, and on 22nd February 1938, oil was discovered. In 1946, Kuwait exported its first cargo of crude oil.
In the early 1970s, in line with the other Arab oil producing states, Kuwait began negotiations to regain control over its own natural oil resources. The State's shareholding in Kuwait Oil Company was progressively increased until full control was achieved in March 1975 and in December 1975, Kuwait’s oil industry was nationalised.
Kuwait Petroleum Corporation (KPC) was established in 1980 to bring together the four state-owned companies responsible for Kuwait’s oil production, processing and transportation under one corporate umbrella. Today, KPC oversees a fully integrated industry with operations spanning six continents. The Burgan well is still in production and remains one of the world’s largest and richest oil fields.