Kuwait oil needs a strong leader

30 August 2010

Restructuring resulting from subsidiary mergers aims to cut out bureaucracy in Kuwait’s oil sector. A more cordial national assembly should allow change

Since Kuwait Petroleum Corporation (KPC) first commissioned a review of its management structure in 1998, the state holding company has had three different chief executive officers (CEOs).

Yet the advice given to KPC in 1999, to completely integrate its subsidiaries into a single company, has not come to fruition.

Consultants, politicians and former KPC executives all agree that the idea of having a single state oil company broken into divisions rather than individual subsidiaries could cut out a lot of the bureaucracy that has plagued the company over the past decade.

KPC effectively accounts for more than 90 per cent of the Kuwaiti government’s income. It is, therefore, difficult to understand how the men who have held the most senior post in the company have repeatedly been frustrated in their efforts to reform what is effectively a money-making machine so that it works more effectively.

Until last year it was virtually impossible for ministries to push through any … new plans without coming under … scrutiny

But Kuwait is too often a place where good ideas go to die. Individual interests and national politics play such a big part in the government’s day-to-day activities that until last year it was virtually impossible for ministries to push through any major new plans without coming under heavy scrutiny.

Relations between the government and members of the National Assembly have been more cordial over the past year, and there is an air of optimism around Kuwait City that a series of long-planned projects may soon move ahead.

Nowhere is this more necessary that in KPC, and no company will need to be such a strong figurehead as the company’s new CEO, due to be appointed in September. If he can restructure the company and push projects through he will have achieved more than anyone has in more than ten years.

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