Kuwaiti Parliament Demands Approval Of All Oil Deals
The Kuwaiti parliament on March 14th passed a resolution requiring that it approve each deal under a government-backed plan to allow foreign oil majors to operate crude fields in the emirate.
The government has been pushing ahead with the controversial $7 billion Kuwait Project to allow international oil firms to double output from northern oil fields to 900,000 b/d within five years under a fees-for-services accord.
The Kuwaiti constitution bans foreign ownership of oil fields and production sharing, but the government says that the plan will allow foreign firms to use technology that Kuwait lacks, while maintaining state control over the emirate’s most prized sector.
A majority of parliamentary members adopted the binding four-page resolution after a three-hour debate. The resolution said that: “Any investment in oil fields has to be [approved] by a law and each contract separately.”
The resolution also demanded a clause in the deals to ban oil majors from using local agents and direct or indirect local beneficiaries, and the parliamentarians have demanded full disclosure of all related information from the government by April 1st, including a draft contract, the economic model and financial and accounting methods to be applied.
Kuwaiti Oil Minister Adel al-Subaih said that the economic model includes the state’s negotiating stands, the disclosure of which could weaken its bargaining powers.
Al-Subaih indicated that some of the requested information had not been finalized and might not be ready by the deadline, although he said after the meeting that Kuwait would push ahead with non-contractual steps of the project, including a request for proposals.
The economic committee was asked to submit a report on the project by May 20th, and a third extraordinary full parliament session has been called for May 30th to review the plan.
© 2001 Mena Report (www.menareport.com)
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