Kuwait’s tightly controlled energy sector is opening up to international oil companies, as the country looks to raise output by a third within a decade.
Prime Minister Sheikh Ahmad Al-Abdullah Al-Sabah said this week that the state-owned Kuwait Petroleum Corp. plans to invite foreign partners to help develop three recent offshore finds, part of efforts to ramp up output to 4 million barrels a day. The country is also weighing a potential $7 billion lease and lease-back deal for its crude oil pipeline network — following similar moves in Saudi Arabia and the UAE in recent years.
However, this is not a full-scale liberalization of the sector: International partners are likely to be offered service-based contracts, rather than equity stakes, for upstream assets. This week, Kuwait signed a deal with France’s TotalEnergies to carry out exploration studies, and handed a five-year, $1.5 billion contract to US services company SLB.
Other efforts to raise output could prove more controversial. Tenders for the Durra oil and gas field — which Kuwait shares with Saudi Arabia — are due to be offered this year, which could lead to regional tensions given Iran also lays claim to part of it.