Kuwait pushes for foreign oil sector investment
Kuwait will forge ahead with plans to open its petroleum sector to foreign
investment, despite objections in parliament. The Kuwaiti oil ministry says the final implementation of the plan will be coordinated with parliament.
Lawmakers say it is unconstitutional - the constitution forbids foreign ownership of natural resources. And even lawmakers who agree with the plan fear foreign companies will somehow cheat the nation.
Islamist lawmakers attacked the government for seeking foreign oil firms to compete for administering a $7 billion oil-fields project without asking parliament's approval.
Oil Minister Saoud Al-Sabbah told Kuawiti newspapers that in spite of the need to move forward with the plan at a time when petroleum markets are asking the major oil producers to increase production, the government wouldn’t take any unilateral decision on the issue.
Kuwait may this month publish a short list of major companies it wants to
compete for administering the northern oil fields. It expects them to double production to 900,000 barrels per day during the next five years. Kuwait wants to increase production to 3 million bpd over the next five years. It currently produces 2.5 million bpd and has 10 percent of world oil reserves.
Before that, Kuwait will issue a protocol of principles for the 25-year-long project, before distributing general applications that would be reviewed by the
Higher Council of Petroleum.
Al-Sabbah said the government was not side stepping parliament, since it had not reached the point of signing a contract and would have to go to parliament to for legislation. An informed source said there are 17 companies on the government list, among them are several American
The source said the opposition in parliament has delayed the government’s plans to
involve foreign investment in its petroleum industry.
The government yielded to pressure and sent the legislature a draft bill on foreign
investment in Kuwait. However, parliament went into summer recess in July before a reading of the draft and will reconvene in October.
The government is asking for clear foreign investment tax laws that would encourage companies to invest in Kuwait. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)