ANALYSIS-Politics hurt Kuwait's progress to 2020 oil target

By Ulf Laessing and Simon Webb

KUWAIT, Oct 4 (Reuters) - A political standoff in Kuwait has delayed progress on projects to boost oil output and left the world's seventh-largest oil exporter struggling to meet its 2020 output target of 4 million barrels per day (bpd).

The OPEC member's oil production capacity now stands at around 2.8 million bpd and is unlikely to be much more by the end of the next decade, analysts said.

"We are very pessimistic about their chances of hitting the 4 million bpd target -- largely because political issues that have long dogged projects are going to continue to be major factors," said David Kirsch, manager of market intelligence at Washington-based consultancy PFC Energy.

Kirsch expects Kuwait's capacity to be just shy of 3 million bpd by 2017.

A key obstacle to expansion plans is winning approval from parliament for international oil companies to take a role in an $8.5 billion scheme to boost output from the country's northern oilfields, known as Project Kuwait.

Despite having debated the plan for more than a decade, Project Kuwait has never gone beyond the committee stage to the floor of the house as some parliamentarians oppose the involvement of foreign companies.

Even with Project Kuwait, the 2020 target looks out of reach, said Colin Lothian, senior analyst for the Middle East at global consultancy Wood Mackenzie.

"They'd struggle even if the project went ahead," he said. "To get to 4 million bpd from where they are now is an awfully big jump."