Dubai — Kuwait has begun taking executive steps to merge two of its state-owned oil firms, news agency Kuna reported on Tuesday, as the OPEC producer seeks to restructure its energy industry.
Kuwait National Petroleum Company (KNPC) plans to acquire Kuwait Integrated Petroleum Industries Company (KIPIC), Kuna reported citing KNPC Chief Executive Wadha Al-Khateeb.
KNPC is in charge of Kuwait’s refining industry while KIPIC is responsible for facilities at the Al Zour refinery.
The rapidly evolving global oil and gas industries place a great responsibility on the country’s energy sector to adapt to the changing dynamics, Kuna cited Al-Khateeb as saying.
Concern about the impact of U.S. trade tariffs have created uncertainty for global oil markets, pushing Brent crude prices down by more than 20% within a week to a four-year low.
Prices have since recovered some ground to about $66 a barrel from below $60.
Kuwait’s Emir Sheikh Meshal al-Ahmad al-Sabah dissolved parliament in May last year and suspended some constitutional articles for up to four years, enabling the government to pass new laws.
The legislature in Kuwait wields more influence than similar bodies in other Gulf monarchies, and political deadlock has for decades led to cabinet reshuffles and dissolutions of parliament.
In March, Kuwait approved its public debt law, paving the way for the Gulf state to sell international debt for the first time in eight years.
“The deal (to merge KNPC and KIPIC) is not a direct outcome of the new Emir’s suspension of parliament, although that may have facilitated moving forward,” Robin Mills, chief executive of consultancy Qamar Energy told Reuters.
“It’s more about rationalising and improving efficiency, given the completion of KIPIC’s Al Zour refinery,” Mills said, adding that there have been plans for further consolidation in the sector in Kuwait.
The Gulf country’s production capacity is over 3 million barrels per day, Kuwait Petroleum Corporation (KPC) CEO told reporters in January.
Kuwait’s merger of KNPC follows a slew of consolidation moves in the sector across the Gulf, beginning with Qatar in 2018 when it merged QatarGas and RasGas to create QatarEnergy.
In March, Abu Dhabi’s ADNOC agreed with Austria’s OMV to merge their polyolefin businesses to create a chemicals power house.
Reporting by Jana Choukeir, Hadeel Al Sayegh and Federico Maccioni; Editing by Gerry Doyle, Christopher Cushing and Susan Fenton – Reuters
