Kuwait Announces Foreign Investment Plan
Kuwait formally announced on January 3rd a controversial plan designed to permit foreign oil firms to develop the emirate’s northern oil fields.
A statement from the Kuwait Petroleum Corp. (KPC) said that: “Kuwait sent out to qualified international oil companies, as approved by the Supreme Petroleum Council (SPC), the Initial Process Protocol (IPP) document which details the process forward.”
An industry source tells Oil Navigator™ that the Kuwaitis have chosen nine firms -- Chevron Corp., Exxon Mobil Corp., Texaco Inc., TotalFinaElf, Royal Dutch/Shell, Conoco Corp., Phillips Petroleum Co., BP Amoco and Eni -- as leading consortium players and possible operators. Other companies could be qualified and added to the list at a later date.
The source tells Oil Navigator™ that Kuwaiti oil officials are looking for formal proposals by the end of the first quarter.
After the issuing of the IPP, data rooms are expected to be opened by early February for potential bidders to study the fields and to assess the emirate’s economic model for the 25-year project, marking the first time in more than two decades that foreign oil companies will be involved in oil development and production in Kuwait.
The Kuwaiti cabinet had in April approved a draft enabling law providing the legislative umbrella for foreign investment in domestic crude fields, but the law requires the approval of the parliament, which is expected to be a lengthy process.
Many parliamentarians are concerned that the law will relinquish Kuwaiti ownership of its most-prized natural resources, despite reassurances from Oil Minister Sheikh Saud Nasser al-Sabah and the Kuwaiti Oil Company (KOC) that the proposed formula for bringing in foreign investment maintains national ownership of the emirate’s crude fields.
© 2001 Mena Report (www.menareport.com)