Kuwait is in talks with financial advisors to tap the local and international debt markets with potential sovereign bonds, according to Kuwaiti finance minister, Anas al-Saleh.

The minister didn’t elaborate on the government’s debt programme while speaking to reporters on the sidelines of a financial conference.

Kuwait, a part of the six-member economic bloc of GCC, is exploring the option of sovereign bonds to plug a budget deficit and maintain spending amid shirking oil revenues. The government has already begun drawing down its financial reserves, but it wants to tap the local and international debt markets to curtail the speed of the drawdown. The six Gulf states account for about a third of the world’s proven oil reserves. Crude, the benchmark for more than half of the global oil reserves, has slumped more than 60 per cent since a mid-2014 peak.

The government had requested a report from local banks on their ability to finance the deficit, and on whether there was enough liquidity in the banking system, news agency Reuters quoted Hamad Abdulmohsen al-Marzouq, chairman of Kuwait Finance House as telling the conference earlier.

The banks have submitted a study to the finance ministry and central bank, estimating that the lenders have the capacity to finance $10bn to $16.7bn over the next three years, Marzouq said.

Kuwait’s Finance ministry projected in January that the government would run a deficit of KD12.2bn ($40.5bn) in the next fiscal year starting on April 1, nearly 50 per cent higher than the deficit estimated for the current year, after contributions by the government to the sovereign wealth fund.