The decision by the technical panel at Kuwait’s Supreme Petroleum Council (SPC) to approve plans for a new refinery will be welcome, although there are lingering doubts about the country’s ability to pass through major projects, not only in the hydrocarbons sector.

But there is now much more confidence that the Gulf’s political situation has improved. The Kuwaiti National Assembly passed a first draft of a new privatisation law on 13 May, which will allow the government to sell state-owned companies and assets to international investors.

In the second half of the year Kuwait will also attempt to pass through a number of major projects including an Independent Water and Power Plant (IWPP) and the Al-Zour refinery. Considering the political wrangling of the last few years, this will be the litmus test that will show if anything has really changed.

Kuwait’s plans for the 615,000 barrel a day (b/d) Al-Zour refinery, which would have been the largest ever built in a single phase, have stalled for two years now, but things are finally moving ahead.

State-refiner, Kuwait National Petroleum Company (KNPC) awarded five contracts in 2008, but before construction had begun, the deals were cancelled on the instructions of the Supreme Petroleum Council (SPC).

This followed a series of questions in parliament over the manner in which the contracts were awarded. KNPC cannot retender the deals without SPC approval, which is expected soon. International contractors, who have waited more than a year for the deal to retendered now estimate the Al-Zour refinery could cost in the region of $14-15bn.  Progress, will show that Kuwait really has moved on.