OPEC producer Kuwait will embark on landmark plans to restructure its hydrocarbon sector by slashing the number of operating companies at the end of the first quarter of 2023, a newspaper reported.

The plan has two phases involving mergers in the Gulf country’s eight oil firms and conversion of the government parent company into a commercial entity, the Arabic language daily Alqabas said, citing official documents.

“The restructuring plan was to be launched in early 2021 but it was delayed for some reasons…restructuring will now begin at the end of the first quarter of 2023,” it said.

Phase one of the plan, a unique oil sector consolidation scheme in the region, includes “mergers among the existing oil companies” while maintaining the parent company—the Kuwait Petroleum Corporation (KPC), the paper said.

Phase two envisages “converting KPC into a commercial venture and liquidation of affiliated oil companies before turning them into operation sectors managed by KPC.

In 2020 KPC appointed the US-based consultant Strategy& to carry out a study for the restructuring of the country’s oil sector, which controls nearly 101 billion barrels of proven crude resources.

After phase one of restructuring, KPC will supervise three autonomous companies covering crude production and exploration, refining and other downstream operations inside Kuwait, and oil industry operations abroad.

Officials and industry sources in Kuwait said the plan would produce many benefits, including cutting effort and decision-making time, saving funds, and preventing duplication in projects and operations.
Source: Zawya Projects