Kuwait has cancelled oil tenders estimated at approximately $10 billion, as bids submitted by foreign contractors far exceeded the approved budget.
Kuwait’s Arabic language daily Alqabas said, citing local oil sources, that the state-owned Kuwait Oil Company (KOC), which is the upstream investment division of the OPEC producer, was the issuer of the nine tenders and was directed to boost production.
The report indicated that the central agency of public tenders (CAPT) has approved the request by KOC to cancel the nine tenders that will be reissued in the future.
The paper reported, adding that they might involve water injection, pipes, and other facilities at KOC oil sites, “KOC had estimated the cost of those projects at around Kdthree billion ($10 billion)…but bids submitted far exceeded that cost.”
The report indicated that KOC, which is one of the largest upstream oil companies in the world, nullified the tenders in accordance with a strategy promoted by the parent company, Kuwait Petroleum Corporation (KPC), to remain within acceptable limits of spending and safeguard the public funds.
The report stated, “KOC has decided not to go ahead with the tenders although several bids had been submitted…it decided to revise the tenders and re-issue them in the next few months.”
Kuwait, a founding OPEC member, has a sustainable oil output capacity of around 2.6 million barrels per day (bpd) and proven crude reserves of 101 billion barrels, the world’s sixth largest.
Currently, the production levels and barring new significant discoveries, Kuwait’s reserves could run out in at least one century. A Zawya Projects report reported in November 2023, that Kuwait intends to invest $50 billion in the coming five years to increase oil and gas production capacity.
KPC’s CEO, Sheikh Nawaf Al-Sabah, added that the investments at an annual average of $9-10 billion will increase Kuwait’s sustainable crude production capacity to 3.2 million bpd.
Sheikh Nawaf indicated that Kuwait had plans to increase its oil production capacity to approximately 4 million bpd by 2035 and gas production to 2 billion cubic feet per day by 2040.
