A US firm charged by Kuwait to undertake a study to restructure the OPEC member's massive hydrocarbon sector to save funds is expected to complete its work before the end of 2021, a local newspaper reported on Thursday.
In 2020, state oil operator, Kuwait Petroleum Corporation (KPC) appointed the US-headquartered Strategy& (formerly Booz&Company) to carry out the study for restructuring which involves mergers to slash its affiliated firms from 8 to 4.
The Arabic language daily Al-Anba said the move is intended to trim spending after the Gulf country's oil industry suffered from a sharp downturn in business through 2020 due to Coronavirus that led to a large decline in revenue.
The paper said the Supreme Petroleum Council (SPC) and KPC have already approved plans to restructure the oil sector, "including cutting the number of operating companies through mergers and reducing industry activities to three main sectors comprising production, exploration and refining."
"KPC sources expect the consultant to complete the restructuring study before the end of 2021... it will then be submitted to SPC so it will give the green light for the restructuring," it said, adding that the plans were delayed by Coronavirus last year.
Industry sources in Kuwait, which controls the world's 6th largest oil deposits, said restructuring and merger of local hydrocarbon companies would produce many benefits, including cutting effort and decision-making time, saving funds, and preventing duplicacy in projects and operations.
In recent comments, Kuwaiti acting Oil Minister Khalid Al-Fadil said that plans to restructure of the oil sector would be implemented gradually and that it includes merger of small firms to create large units.
According to Al-Anba, the firm affiliated to KPC are:
• Kuwait Oil Company (KOC)
• Kuwait National Petroleum Company (KNPC)
• Petrochemicals Industries Company (PIC)
• Kuwait Oil Tanker Company (KOTC)
• Kuwait Foreign Petroleum Exploration Company (KUFPEC)
• Kuwait Petroleum International Limited (KPI - Q8)
• Kuwait Gulf Oil Company (KGOC)
• Kuwait Integrated Petrochemical Industries Company (KIPIC)
(Writing by Nadim Kawach; Editing by Anoop Menon)
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