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KUWAIT (Reuters) - Kuwait’s finance minister said on Wednesday that an increase in oil revenues due to higher crude prices would not cover the Gulf state’s budget obligations and he called for radical economic reforms.Kuwait’s budget would need oil prices of $90 per barrel to eliminate its deficit, the minister, Khalifa Hamada, said in a statement.
Oil prices continued its upward journey in the international market on Friday, as oil producers like Kuwait indicated a swift output cut. Benchmark Brent crude rose 2.8%, at $21.93 per barrel. U.S. WTI crude climbed 4%, to $17.16 a barrel. Kuwaiti state news agency, KUNA yesterday said that the country will not wait for the official start of the OPEC+ deal and start cutting supplies to international markets right away.
The Arabic language daily Alanba has reported about Kuwait granting three contracts for the provision of maintenance and engineering services for two of its oil refineries with a combined value of $481 million. The first contract is worth $313 million for engineering and mechanical works at Al-Ahmadi refinery, the second deal is worth $168 million for Block-2 maintenance services for the 615,000-bpd Al-Zour refinery.
The energy supermajor, Saudi Aramco informed about a new agreement between Saudi Arabia and Kuwait. After this agreement, oil production in the zone shared between two countries can be resumed. "With the signing of this new accord, both parties have reached the consensus that now is the right time to resume production in this zone", said Aramco's CEO.
Energy Minister of Saudi Arabia has announced that the production might resume from the Neutral Zone which is shared by Saudi and Kuwait. He mentioned that the country is expected to reach an agreement with Kuwait on the same. If this happens, it would add up to 500,000 bpd of the output of Saudi and Kuwait each. Saudi's Energy Minister and Emir of Kuwait had a meeting on Tuesday.
Taking leverage of India's growth story, Kuwait plans to double its investment in the country. The Kuwait Investment Authority (KIA) has currently invested five billion dollars in India and further plans for an opportunity of a third party joint project with Delhi. India's Ministry of External Affairs has informed that "India is looking for a substantial Kuwaiti investments in oil & gas sector."
Weatherford International has completed its sale of land drilling operations in Kuwait. The company has sold 12 drilling rigs to ADES International Holding for $123 million and the delivery of two idle land drilling rigs in southern Iraq are pending. Weatherford’s subsidiary signed a definitive agreement with ADES in July 2018 for the sale of its Algeria, Kuwait and Saudi Arabia. It also included two idle rigs in Iraq.
Kuwait Foreign Petroleum Exploration Co., a unit of KPC, borrowed a five-year loan worth $1.1 billion with the help of Sumitomo Mitsui Banking Corp. and Societe Generale SA. The company is planning to expand its shale operations, so the money will be spent on the projects of oil and natural gas. Further, Kufpec plans to increase its production capacity to 119,000 barrels of oil equivalent per day by next month.
Kuwait Petroleum Corp’s subsidiary, KIPIC has entered into a $180 million contract with Montreal-based SNC-Lavalin Group Inc. Under this agreement, SNC-Lavalin will provide services to the startup of the grassroots 615,000-b/d Al-Zour integrated refining complex under construction in southern Kuwait. Al-Zour refinery is part of KPCs downstream program under its 2030 strategy, to improve its refining and manufacturing sectors.
ADES has entered into an acquisition agreement amounting to $287.5m to buy Weatherford subsidiary’s land drilling rig operations in Algeria, Kuwait, and Saudi Arabia. The agreement will give ADES the ownership of 31 land drilling rigs and related drilling contracts. ADES International Holding has said that the deal will expand its total fleet and more than double its operational fleet. The deal is expected to close by 2018.
Canada’s largest drilling contractor, Precision Drilling Corp. has bagged a 5-year take-or-pay contract of newbuild ST-3000 drilling rig in Kuwait whose capital cost is estimated to be around $60 million. Through free cash flow generation, Precision is looking to reduce its debt in 2018. Demands for Precision’s rigs have risen considerably in the U.S.
Adhering to the agreement that was reached in the OPEC meeting last month, Kuwait has elevated its oil output by 85,000 barrels per day (bpd). The confirmation came from Kuwait's Oil Minister and Minister of Electricity and Water, as he stated that “Kuwait will raise its oil production from tomorrow to 2.785 million barrels, a daily increase of 85,000 compared to May, based on last week’s production cut agreement.”
Kuwait National Petroleum Company (KNPC) will be floating a tender this June 17th worth 2.5 million to provide spare parts of turbines and compressors for gas operations at Ahmadi Refinery. The tender is being said to be in conjunction with the gas pipeline in Ahmadi, with capacity reaching up to 800 million cubic meters daily per pipeline next year.
Oil Plus, the oil and gas water injection specialist, has considerably expanded its footprint in the Middle East after securing contracts worth more than $1.5 million in the last three months. The firm will deliver reservoir souring modelling, production chemistry and iron sulphide studies for several international oil companies in Saudi Arabia, Kuwait, Brazil, Thailand and Europe.
According to the Kuwait Fire Service Directorate (KFSD), 15 oilfield workers lost their lives in a head-on crash on Sunday. This tragic incident occurred on the Al- Artal road where two buses were carrying employees engaged in operations near the Burgan oilfield, one of the region’s giant fields. The victims include seven Indian nationals, five Egyptians, three Pakistanis and others who are in a critical condition.