Project Kuwait approval put on hold until October

The Kuwaiti parliament will not take the Project Kuwait bill up for debate until October, Oil&Gas Middle East has learned. The bill, which has been held up for years because it allows foreign investment in Kuwait’s oil & gas sector, will have to wait until after the summer for ratification, sources confirmed.

  • E-Mail
By  Jyotsna Ravishankar Published  July 4, 2005

The Kuwaiti parliament will not take the Project Kuwait bill up for debate until October, Oil&Gas Middle East has learned. The bill, which has been held up for years because it allows foreign investment in Kuwait’s oil & gas sector, will have to wait until after the summer for ratification, sources confirmed. Earlier, a Kuwaiti parliamentary committee had unanimously approved the bill, which will allow foreign companies to invest in four oilfields near the border with Iraq at an estimated cost of US $8.5 billion. The next step, according to MP Abdelwahab Haroun, was to submit the report to the Kuwaiti parliament for approval. However, the imminent summer recess of parliament means the bill will not be debated by MPs until later in the year. Project Kuwait has been stalled for more than a decade by resistance from MPs who fear that the emirate’s oil resources could be surrendered to international oil companies. It will be the first major foreign investment in Kuwait’s oil sector since the country nationalised its oil wealth in the early 1970s. Oil income contributes more than 90% of total government revenues. “If it is approved by the house, we will immediately start preparations for inviting bidders to the project before the end of this year,” Sheikh Ahmad Al Fahd Al Sabah, Kuwait’s oil minister, told reporters. Sources said, even if parliament approves the plan, the project will be in a position to begin only in the first or second quarter of next year at the earliest. Procedures and frameworks for any foreign investment have still to be put in place.Contracts with international oil companies are likely to be simple service contracts and will not involve foreign ownership of assets. The project to develop the OPEC member’s northern fields was first put forward in 1992. Kuwait wants to boost oil production from the fields from 530,000 bpd currently to 900,000 bpd during the duration of the project, which will run for 20 years. Haroun said the panel introduced a number of changes to the government bill before approving it. It first limited the investment to the oilfields of Rawdatin, Abdali, Sabriya and Ritka and it would not open other fields. The committee also ruled out any role for agents or brokers in the project. According to Kuwaiti agency laws, any foreign company must have a Kuwaiti partner to operate in the country, but Project Kuwait has been exempted from the rule, Haroun told reporters.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code