Local and international engineering, procurement and construction (EPC) contractors hoping to win work in Kuwait will have to submit a raft of new documents to prequalify for new upstream oil projects, under new regulations set out by state-owned Kuwait Oil Company (KOC).
They have until the end of the year to submit their documents to the Kuwait embassies in their home countries, according to contractors.
Rather than asking contractors to prequalify for individual projects, KOC launches regular prequalification rounds, allowing companies to qualify under a variety of different categories. The last round was held in 2015.
The new regulations come after KOC reassessed its existing contractor qualifications to check whether the contractors are active and financially sound, one source said.
This includes tightening controls to prevent defaults and reducing delays to projects, according to reports cited in the Arab Times.
International contractors must have completed at least two similar projects outside their own country of origin to be allowed to bid on new projects.
KOC, the state-upstream operator currently has 27 major projects in the pre-execution phase, worth approximately $15.8bn, according to MEED Project’s data. These include a number of projects under study, or with front-end engineering and design (feed) work under way.
EPC bids for seven projects, worth just over $5bn are currently being evaluated by KOC. These include a deal worth an estimated $3.5bn for the remediation of environmental damaged caused by oil lakes formed during the withdrawal of Iraq armed forces from Kuwait in 1991.
Kuwait’s Oil Ministry is looking to increase capacity to 4 million barrels a day (b/d) by 2020, up from around 3.2 million b/d currently. KOC’s own target is to reach 3.65 million b/d by 2020, with the remainder expected to come from Kuwait’s share of output from the Partitioned Neutral Zone with Saudi Arabia.
Analysts have long been sceptical of Kuwait’s ability to hit that target, and Oil Minister Bakheet al-Rashidi conceded earlier this month that KOC was only likely to reach it by 2022 after setbacks to a number of projects.
Nevertheless, the oil ministry has set a longer-term target of increasing production capacity to 4.75 million b/d by 2040.