Government under fire for inviting foreign oil majors into Kuwait
A Kuwaiti MP raised questions Sunday about the legal basis of plans for foreign oil majors to develop the emirate's rich northern oilfields.
The state-owned conglomerate Kuwait Petroleum Corp. (KPC) on Wednesday sent an Initial Protocol Process (IPP) document to eight prequalified international oil companies.
But Islamist MP Nasser al-Sane, who opposes the plan, said the government should have first sought parliament's consent and has violated the law.
In a series of questions to Oil Minister Sheikh Saud Nasser al-Sabah, Sane demanded to know the grounds the KPC has adopted in prequalifying a number of IOCs and rejecting others.
Sane, a leading a campign in parliament to make sure the government did not surrender "national resources," also asked the minister in questions submitted to parliament for details on the project and names of prequalified oil companies.
Although no official announcement has been made, it is widely believed that KPC has prequalified BP Amocco, ExxonMobil, ENI, TotalFinaElf, Chevron, Texaco, Conoco and Shell as operators for the seven-billion-dollar project.
The KPC has also prequalified a dozen other foreign firms as non-operators.
MPs insist that the government must not take any action before parliament reviews and passes a bill to regulate the role of foreign oil majors in Kuwait.
The government approved the bill and sent it to parliament in April last year. The assembly's finance and economic committee was scheduled to begin studying it Wednesday.
Sheikh Saud on Saturday defended the KPC action in sending the IPPs by insisting that "practical and routine steps" of the project remain a government jurisdiction.
"But we will discuss the legal and constitutional aspects of the project with MPs...We have asked parliament to give the draft bill a state of urgency," Sheikh Saud said.
The legislation for the so-called Kuwait Project, rules out any foreign ownership of Kuwait's natural resources.
All contracts to be signed with foreign investors to develop oilfields will be done so without infringing on state ownership of oil resources, the bill said.
Investors will be offered 20-year agreements which are extendable by two five-year periods, but at least 70 percent of the workforce employed must be Kuwaiti nationals, which can be reduced by the government, the bill said.
The Gulf Arab state aims to double production capacity of its northern oilfields to 900,000 barrels per day in 2005, and the government insists that this can only be achieved through foreign assistance.
Foreign oil firms in Kuwait, which holds around 10 percent of global oil reserves, have previously been restricted to technical service agreements—AFP.
©--Agence France Persse.
© 2001 Mena Report (www.menareport.com)