‘Govt resignation to delay projects’
KUWAIT CITY, April 25: According to a report published by MEED magazine, the government’s resignation will leave the Kuwait Oil Company (KOC) without a CEO. This may cause further delay in the implementation of the oil sector projects, reports Al-Rai daily. The report explained that the government’s resignation on April 5 has already caused significant delays in the country’s oil and gas sector, and it is likely to have a significant long-term impact on the economy, which is largely dependent on energy sector’s revenues.
The resignation led to the freezing of procedures related to the ongoing restructuring of the Kuwait Petroleum Corporation (KPC) and its subsidiaries. It was expected in April that a final series of promotions and appointments would be made in the last stage of the restructuring, but it will now be suspended until the formation of a new government. The resignation of the government could lead to dire consequences for the planned projects in the oil and gas sector. It quoted a source as saying, “Not all major projects will be able to obtain the necessary approvals and signatures. We will witness significant delays in all areas. Only very small projects will achieve great progress. It is expected that there will be delays in announcing projects, offering tenders and awarding contracts”.
Another source said, “This is a real disaster for the oil and gas sector in Kuwait at a time when many were hoping to see an improvement”. In 2020 and 2021, Kuwait witnessed very low levels of activity in the oil and gas sector amid local political problems, ongoing restructuring of oil companies, low global oil prices, and logistical problems caused by the COVID-19 pandemic. Many stakeholders in the Kuwaiti oil and gas sector saw the possibility of a recovery in activity during the second half of 2022, with the increase in global oil and gas prices, after the logistical problems caused by the COVID-19 crisis were largely brought under control. Now with the resignation of the government, it seems that the country will find it difficult to take full advantage of the more favorable economic environment, which will negatively affect the revitalization of the oil and gas sector in the coming months.
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