The Kuwait government has replaced the heads of all but one of Kuwait Petroleum Corporation’s (KPC) eight subsidiaries following the sacking of KPC chief executive officer Farouk al-Zanki.

The massive shake-up comes after the recent decision by the International Chamber of Commerce (ICC) to award the US’ Dow Chemical $2.19bn in damages relating to the collapse of the $17.4bn K-Dow Petrochemicals joint venture in December 2008.

However, in an announcement on the state-owned Kuwait news Agency (Kuna), KPC said that the move had nothing to do with the fallout from the K-Dow compensation payout, despite intense speculation to the contrary.

“The decision comes according to the cabinet’s wishes to ‘infuse new blood’ into the oil sector and to give the opportunity for a second generation to carry full responsibilities amid requirements in the coming stage,” the statement said.

How the personnel changes will affect current and future projects in Kuwait’s oil, gas and petrochemicals industries is not yet known. Many experts now fear that some major schemes could be delayed at best or cancelled at worst.

“There has been rumblings for some time regarding some of the more ambitious projects and now there is a worry one or more could be cancelled,” says an oil and gas executive working in Kuwait.

The source says that he thinks the much-delayed $15bn New Refinery Project (NRP) is the most at risk.

Several officials from Petrochemical Industries Company (PIC) have been relieved of their duties and suspended pending an investigation into the K-Dow joint venture.

As part of the original agreement, Dow was to receive $9bn in pre-tax profits at the start of the K-Dow Petrochemicals joint venture. PIC was also to pay Dow $7.5bn for its stake in the venture.

A deal had been announced on 4 December 2008 after almost 12 months of planning. It was cancelled on 28 December, after Kuwait’s Supreme Petroleum Council, the country’s highest oil decision-making body, withdrew its support and approval for the deal.

Kuwait’s parliament argued that the government was overpaying on its $7.5bn investment, and that the US firm was unloading some of its ageing US assets, with some plants more than 40 years old.

PIC and Dow are still partners on several other projects, including ME Global, and the Equate polymers joint venture, where the two are equal 42.5 per cent stakeholders.

The executives affected are:

KPC  (chief executive officer)

• Out: Farouk al-Zanki
• In: Nizar al-Adsani

Kuwait Oil Company (managing director)

• Out: Sami al-Rashaid
• In: Hashem Hashem

Kuwait National Petroleum Company (managing director)

• Out: Fahad al-Adwah (retired)
• In: Mohammad al-Mutairi

Petrochemical Industries Company (managing director)

• Out: Maha Mulla Hussein
• In: Asaad al-Saad

Kuwait Oil Tanker Company (managing director)

• Out: Bader N. Alkhashti
• In: Ahmed Behbehani

Kuwait Petroleum International (managing director)

• Out: Hussain E Esmaiel
• In: Bekheet al-Rashidi

Kuwait Foreign Petroleum Exploration Company (managing director)

• Out: Nizar al-Adsani (promoted)
• In: Sheikh Nawaf al-Sabah

Kuwait Gulf Oil Company (managing director)

• Out: Hashim al-Rifaai
• In: Ali al-Shemmeri

Oil Sector Services Company (managing director)

• In: Ali al-Obaid (was previously acting managing director)