Kuwait Petroleum Corporation is reportedly reevaluating plans to spend around $500 Bn in capital investment. The organization is most likely to come up with a decision this year regarding the merger of its 8 business units into 4 to streamline the organization, reported a source with the knowledge of the matter.
Reduced oil costs, Kuwait’s decreased production under a contract by OPEC to pump lesser crude, and a reassessment of how best to utilize the money have incited the evaluation, the source stated, seeking anonymity as the likely changes are yet to be accepted.
Reportedly, the Kuwait Petroleum Corporation publicized plans in the previous year to spend around $500 Bn on capital projects till 2040.
State-owned KPC might also combine Kuwait Integrated Petroleum Industries Co, Kuwait Oil Tanker Co, Kuwait Foreign Petroleum Co, and Kuwait Gulf Oil Co into bigger units as per its long-term business strategy, the source reported. The association would still need the consent of the Supreme Petroleum Council, the source added.
According to trusted reports, the previous oil minister of Kuwait resigned in December owing to constant internal disputes which delayed several projects. The oil industry of Emirate which produces over 90 percent of the public revenue has been struggling amid political strife for almost two decades. Reportedly, KPC has plans to expand in the petrochemical and refining sector owing to a 28% decline in benchmark Brent crude as of 3rd October.
In accordance with KPC’s reconsideration of planned expenditure, the company is reassessing spending in so-called heavy oil, which is expensive to manufacture, cite credible sources. Moreover, the company aims to attain a production capacity of 85,000 barrels per day of heavy oil by the year 2020 or 2021 and is spending to create reservoirs for the dense crude. Kuwait, which is the fourth-largest manufacturer in the OPEC Countries, produced 2.75 Mn barrels per day in January, as per trusted estimates.