KUWAIT -- Kuwait issued on Tuesday a decree-law amending certain provisions of the Kuwait Petroleum Corporation (KPC) law, in a move designed to reinforce its commercial operating model and enhance its competitiveness in global energy markets.


The amendments underscore a strategic shift toward a more commercial operating model, explicitly affirming that KPC is to be managed on commercial principles in line with global industry standards, enhancing its operational efficiency and its role as a key economic driver.


The decree also expands KPC's mandate to include investment in renewable energy sources to meet the needs of the corporation and its subsidiaries, reflecting a gradual shift toward diversification and long-term sustainability.


It, however, stipulates that any integration of such energy into the national power grid will remain subject to approval by the Ministry of Electricity and Water.


In addition, the amendments grant KPC greater flexibility in executing its activities, either directly or through its subsidiaries. They also strengthen the role of the Supreme Petroleum Council by transferring to it the authority to approve borrowing, lending, and guarantees, thereby reinforcing strategic oversight of the sector.


From a governance perspective, the decree introduces clearer provisions regarding the composition and tenure of the board of directors, appointment mechanisms, and the responsibilities of the Chief Executive Officer, while maintaining the Minister of Oil as chairman of the board.


Further changes include the transfer of certain operational powers to KPC's board to accelerate decision-making and enhance institutional agility, in line with the fast-paced nature of the oil industry.


The amendments also address financial governance by aligning KPC's fiscal year with state budget regulations and formalizing revenue allocation mechanisms for general reserves. They prohibit the use of intermediaries, including local and commission agents, in contracting processes, with the aim of reducing costs and enhancing transparency.
Furthermore, day-to-day operational powers have been decentralized to KPC's Board of Directors, allowing it to establish internal regulations for tendering, awarding, and executing contracts for wholly-owned subsidiaries with a view to bypass bureaucratic bottlenecks to match the fast-paced nature of the global oil industry while preserving the Supreme Petroleum Council's focus on macro public policy.


The decree also eases certain pre-approval controls to enable faster execution of commercial transactions, supporting KPC's ability to compete in a dynamic global environment.
The decree additionally allows for future adjustments to KPC's capital through a similar legislative mechanism.
It also stipulates that the current board of directors will continue to operate until the end of its term or until a new board is appointed.


Any provisions conflicting with the new amendments are repealed, and the law will come into effect upon its publication in the Official Gazette. 

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