Kuwait will announce by 27 October the selection of members to its new Supreme Petroleum Council (SPC), according to sources close to the cabinet.
“They are about to select the council,” a source told MEED on 25 October. “It will be announced within the next 48 hours.”
The 12-member council is the highest decision-making body in Kuwait’s oil and gas sector. The previous council was dissolved in May when the country’s National Assembly (parliament) was dissolved as a result of growing tensions between parliament and the cabinet.
SPC approval is required for any policy or legislative decision made by the country’s oil ministry, any major personnel changes at state energy company Kuwait Petroleum Corporation (KPC), the award of major contracts, the auditing of KPC and its subsidiaries, and for the establishment of new companies, takeovers, or mergers.
In recent years however, the SPC has become increasingly involved in the country’s political process, and was at the centre of the collapse of two high-profile deals in 2008 and 2009 under intense pressure from nationalist members of parliament.
In December 2008, the SPC cancelled a $17.4bn joint venture, K-Dow, between state petrochemicals producer Petrochemical Industries Company (PIC) and the US’ Dow Chemical. The US major is currently pursuing compensation of up to $3.5bn as a result of the cancellation.
In March 2009, the company cancelled contracts awarded a year before for the construction of an estimated $15bn new refinery at Al-Zour. A number of companies that were awarded deals on the scheme are also pushing for compensation after being asked to pay back multi-million dollar advances paid by state refinery company Kuwait National Petroleum Company (KNPC).
The new SPC is required to make decisions on a series of controversial issues including the a re-tender of the Al-Zour refinery project and a multi-billion dollar scheme to involve international oil companies (IOCs) in the development of key oilfields in the north of the country known as Project Kuwait.
The SPC is traditionally chaired by the country’s prime minister, in this case Sheikh Nasser Mohamed al-Sabah. Council members usually include Kuwait’s ministers of oil, finance, and trade and development alongside the governor of the Central Bank of Kuwait.
Nationalist MPs have called for space to be made in the SPC for local business leaders and opposition MPs, arguing that the council needs to be more bi-partisan.
“There will not be any big changes in the SPC,” says local oil analyst Kamel al-Harami.