Kuwait plans to award a 1.2 billion dinar ($4.3 billion) contract later this year for the first phase of a project to produce heavy oil at its northern Ratqa field, the head of state-owned Kuwait Oil Company (KOC) said.

The project is part of efforts to meet Kuwait's target of producing 4 million barrels of oil per day (bpd) by 2020. The Opec member currently produces around 3 million bpd and exports around two-thirds.

The deadline for bids for the engineering, procurement and construction (EPC) contract is May 11, but this may be extended if companies continue to have queries, KOC chief executive Hashem Hashem told reporters on the sidelines of an oil conference on Tuesday.

"This is (for) facilities needed to develop heavy oil, to be able to produce up to 60,000 (bpd)," he said of the planned first phase of the project at Kuwait's northern Ratqa field.

"All the international EPC contractors showed interest, and they are actively participating in this bid," he said. KOC will spend about three months assessing the bids and award the contract by about October, he added.

The 60,000 bpd should be online by 2017 or 2018, he told the conference. By 2020, the production should be 120,000 bpd and KOC will evaluate whether it needs to raise this to 270,000 bpd beyond that date, he said.

Kuwait's oil production comes mainly from a few mature fields, dominated by the huge Burgan field in the south of the country. Kuwait's current capacity is around 3.25 million bpd, with KOC's share at around 3 million bpd, Hashem said.

To bring the capacity up to 4 million bpd by 2020, KOC will contribute an extra 650,000 bpd, he said.

"The growth of production is going to come from north Kuwait," he said. Currently KOC is producing around 700,000 bpd there and will boost this by 300,000 bpd, he said.

Hashem expected that Kuwait's Jurassic gas field project, also in the north, would produce an associated 300,000-350,000 bpd of light oil.

Asked whether Kuwait was looking at shale gas production, Hashem said there was potential for it but that such operations were low on KOC's priority list.

"We have a huge bundle of reserves. The priority of shale gas ... is not that big."  - Reuters