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Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) has awarded a multi-year contract to the Houston-based oil services company Baker Hughes, according to a statement from the US company.

The contract is focused on accelerating technology innovation in the country’s upstream energy sector, the statement said.

Baker Hughes did not disclose the contract value.

It said that the deal positioned Baker Hughes as a key technology collaborator in the Ahmadi Innovation Valley (AIV), KOC’s flagship initiative aimed at establishing an in-country research and innovation hub to address its strategic oil and gas development priorities.

Under the terms of the agreement, Baker Hughes and KOC will focus on developing and deploying technology solutions that optimise production as well as addressing other issues.

Baker Hughes said it is planning to use its portfolio of digital and artificial intelligence (AI) automation solutions as part of the deal.

These solutions are designed to help operators increase recovery from existing wells, lower operating costs, reduce water production and minimise power consumption, it said.

Baker Hughes chairman and CEO Lorenzo Simonelli said: “Baker Hughes is committed to deeply understanding KOC’s development aspirations and providing the solutions needed to help achieve them.

“Working together, we aim to deliver tailored technology solutions at scale that improve production performance and efficiency, supporting KOC’s goals to maximise value from their assets.”

As part of the agreement, Baker Hughes will build a dedicated research and technology development centre in the AIV to deliver technology solutions and build local expertise.

Kuwait’s oil and gas sector is currently in crisis due to the regional war that started after the US and Israel attacked Iran on 28 February.

The war has severely disrupted exports through the Strait of Hormuz, which Kuwait relies on in order to ship crude exports.

Shaikh Nawaf Saud Al-Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation (KPC), the country’s state energy conglomerate, has described the current crisis as the biggest oil crisis the country has faced since Iraq’s 1990 invasion.

Kuwait relies on the oil and gas sector for more than 90% of government revenues.

Despite the dramatic reduction in crude exports, Kuwait’s state-owned oil companies continue to tender some projects.