More than a year after inviting contractors to prequalify, state-owned upstream operator Kuwait Oil Company (KOC) is yet to announce an official list of registered contractors for its projects, due to a series of delays.
The prequalification process started in January 2015, when KOC invited engineering, procurement and construction (EPC) contractors to register.
Originally the deadline to submit prequalification documents was 9 March and the list of approved contractors was due to be published in the summer of 2015.
Complications meant that the list was not published in the summer and contractors were asked to resubmit documents in the second half of the year.
It is believed that the reissue was launched to deal with complications to the process that had arisen due to contractor mergers and acquisitions, said one industry source.
In June 2014, the EPC contractor SNC-Lavalin agreed to buy its rival Kentz Corporation for $1.97bn.
The failure to publish a new list of approved contractors has sparked concerns that the tendering process for future projects may be disrupted due to uncertainty over eligibility.
Were waiting for a few projects to be tendered and the process seems to be slower than usual, said one source. The problems with approving contractors could be a factor. Another factor is the budget squeeze.
Kuwait has seen government revenues slashed over the last 18 months due to the decline in oil prices.
Since June 2014, global oil prices have fallen by two-thirds with West Texas Intermediate crude slumping below $30 a barrel in January 2016.
Rather than asking contractors to prequalify for projects individually, KOC launches regular prequalification rounds, allowing companies to qualify under a variety of different categories.
In the latest round, contractors have the opportunity to register under four categories. These are:
- Megaprojects contract value between $1bn and $2bn
- Major projects contract value between $600m and $1bn
- Large projects contract value between $350m and $600m
- Small projects contract value less than $350m