Despite being the fourth-largest oil exporter in the world, Kuwait continues to underperform. Since 2008, the oil sector has been stifled by bureaucratic and political obstacles, which have stalled investment plans. The oil minister and major projects have become particular targets for the country’s parliament. This has led to frequent changes in management at KPC and the Oil Ministry.

Since 2008, KOC’s contract awards have averaged just $5.3bn a year, including spending on EPC projects and drilling. This is considerably less than a similarly sized oil market such as the UAE. Kuwait will have to overcome these bureaucratic and political hurdles if it is to reach its production targets.

The role of international oil companies in the country has been a particular source of parliamentary opposition. The Oil Ministry argues that the firms are needed to provide technical expertise as production becomes more challenging, but the state’s constitution forbids foreign ownership of natural resources and parliament has blocked all attempts to bring in help.

Kuwait’s ambitions to increase its gas production have also faced major problems. It had originally hoped to reach 1 billion cf/d by 2016 or 2017, but has faced numerous difficulties with the technically challenging resource. It has already missed its 2011 and 2015 targets of reaching 600 million and 1 billion cf/d.

KOC is currently considering a retender for the stalled Jurassic gas scheme. The project is notable for its use of the build-own-transfer contracting model, where the plants will be owned by the contractor for five years, before being handed over to KOC. However, the model has been a major hindrance to the scheme’s progress. Three years after the local Kharafi National won the deal, financing has not been secured and progress has yet to be made.

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