The government has submitted a new draft law for the development of the northern oil fields to replace that submitted in 2000.
The cabinet's new Bill has already been registered on the agenda of the National Assembly for referral to the Finance and Economic Affairs Committee.
The parliamentary committee is expected to study it on a priority basis, and present it to the house very soon.
The new draft law is based on "technical agreements", instead of the traditional Production Sharing Agreements with international energy companies. The draft also includes Kuwaiti shareholding companies.
Foreign firms who tender for contracts will be permitted to do so without the need for local sponsors.
The new draft also proposes that national manpower employed in the project should be 60 per cent.
The duration of the contract period will be 20 years, and is renewable for up to 30 years (10 additional years).
The law also requires the buying of raw materials from the local market and imposes a 25 per cent income tax on both local and international companies.
Based on the draft, the state will maintain complete ownership of all resources, with the right to determine output and prices.
The draft also gives the Supreme Petroleum Council the right to formulate all the relevant specifications and conditions to guarantee transparency and fair competition.
The controversial project, commonly known as Project Kuwait, has been delayed for over 10 years. The delay is the result of opposition from Kuwaiti parliamentarians, who have in the past voiced strong opposition to foreign ownership of the country's natural wealth.
The Kuwaiti constitution forbids any foreign investment in the country's natural resources without a law.
The government anticipates that it would spend $40 billion (Dh146 billion) in the next 20 years to increase productivity in the northern fields.
A closer look at the controversial project
- Three major consortia are competing for the project. They are: Chevron Texaco (along with Total, Petro-Canada, Sibneft and Sinopec); ExxonMobil (along with Shell, ConocoPhillips and Maersk); and BP (along with Occidental, ONGC/Indian Oil Corporation).
- The fields included in Project Kuwait are: Raudhatain, Sabriya, Ratqa, Bahra, Minagish and Umm Gudair.
- Kuwait will spend $7 billion (Dh25 billion) in three areas near the Iraqi border: Abdali, Ratqa and Raudhatain.
Gulf News
