The Kuwaiti national assembly reconvened on October 28th after a three-month summer recess and is expected to weigh in on the question of foreign oil company participation in the country’s upstream sector.
The assembly avoided making a decision on the matter before adjourning in July, and it is likely that it will prove a contentious issue again. At issue is the $7 billion Kuwait Project, backed by Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah, that will bring foreign oil firms into Kuwait’s prized upstream sector.
Sheikh Saud maintains that the plans he and state oil firm Kuwait Petroleum Corp. (KPC) have for allowing international oil companies (IOCs) to develop Kuwaiti crude fields would not threaten national ownership of the emirate’s energy resources.
The IOCs would engage in operating service agreements, from which they could book the crude reserves under U.S. Securities and Exchange Commission (SEC) guidelines, without granting ownership of them to the companies.
Sources have suggested that the national assembly will prolong the discussion over several months, after shooting down a draft proposal in February that covered the upstream plan.
In April, the Kuwaiti cabinet approved a revised version of the draft law, providing the legislative umbrella to allow IOC involvement in domestic crude fields, which is to be discussed in the new parliamentary session.
The chances of a non-confrontational parliament in the next several months is thought to be unlikely, particularly after the al-Sabah government was confronted on October 18th with the resignation of one of its cabinet members, Information Minister Saad bin Tiflah al-Ajmi.
Sheikh Saud is currently serving as acting information minister, the post he held before his appointment to the oil ministry, until a replacement can be found. The reconvening of parliament comes amid rumors that there may be another cabinet reshuffle, although the oil minister would likely be unaffected.