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Kuwait ‘ready to go ahead with merger of state oil companies’

Visitors to Kuwait Towers look out over the city. Kuwait is Opec’s fifth-largest oil producer Shutterstock/Claudio Soldi
Visitors to Kuwait Towers look out over the city. Kuwait is Opec’s fifth-largest oil producer
  • Kuwait Petroleum Corp to oversee deals
  • First merger expected in April
  • Kuwait aims to raise output by 40%

Kuwait’s plan to merge some of its eight state-owned oil companies is ready to go ahead, according to reports in the country.

Kuwait Petroleum Corporation (KPC), which manages the country’s hydrocarbon industry, is set to oversee the mergers. The plan was approved by the cabinet two years ago as part of a strategy to cut costs and increase efficiency.

The Arabic-language newspaper Alseyassah reported on Monday that the first deal would involve Kuwait National Petroleum Company (KNPC) and Kuwait Integrated Petrochemical industries Company (KIPIC).

Citing local oil sources, the newspaper said the merger of the two KPC-affiliated businesses could “start at the beginning of KNPC’s 2025-26 budget”. The 2025-26 fiscal year begins on April 1.

KNPC is in charge of the refining industry and KIPIC is responsible for facilities at the Al Zour oil refinery in the south of the country.

Earlier this month, an engineer at KIPIC posted on LinkedIn that a committee had been formed to oversee the merger and that “engineers in both companies are collaborating to harmonize processes, especially in shared areas such as refinery operations, pipeline projects, and energy distribution”.

An industry source, who declined to be named, confirmed to AGBI on Monday that the merger has been under discussion since last year and that a committee had been formed to evaluate it. 

The Kuwaiti daily Alanba reported in late 2024 that there were plans to merge four KPC subsidiaries and the process would start at the end of March.

As well as the KNPC-KIPIC deal, a merger is expected between Kuwait Oil Company and Kuwait Gulf Oil Company. The former manages the upstream sector while the latter runs Kuwait’s oil interests in the neutral zone shared with Saudi Arabia.

In 2020 KPC appointed the US consultancy Strategy& (part of PwC) to conduct research into oil sector restructuring.

Kuwaiti officials said in 2023 that the mergers would reduce decision-making time and prevent duplication in projects and operations. 

Khaled Al Fadel, who was acting oil minister in 2020, said at the time that the restructuring would be implemented gradually. 

AGBI reported last week that Kuwait Oil Company had discovered large commercial volumes of hydrocarbons at the Al Jlaiaa offshore field and expects more discoveries in the area.

This follows a large discovery at Al Nokhatha field in July 2024.

Kuwait, Opec’s fifth-largest producer, has a production capacity of about 2.8 million barrels per day. It is planning to increase its capacity by up to 40 percent, despite a bearish outlook for global demand and years of stagnant growth.

“It is an ambitious plan – and I think we’re going to reach the target,” Khaled Al Sabah, managing director of KPC and CEO of Kuwait Oil Tanker Company, told an energy conference earlier this month.