KPC JV with Duqm refinery not in line with our oil policy
Refiner to directly compete with our mkts
Last week, Kuwait Petroleum Corporation (KPC) signed an agreement with Oman to build a joint refinery in Duqm at a cost of $7 billion and with oil capacity of 230,000 barrels per day. This project is outside KPC’s oil policy of investing in overseas refineries for ensuring a safe and secure home for Kuwaiti oil in the same consuming country.
Regarding Duqm Refinery, it is an export refinery designed to almost compete with our refineries in Kuwait. This refinery will be in direct competition with our own established markets in the East and West.
If this project is part of the economic cooperation between the two Arabian Gulf states and within the Gulf Cooperation Council (GCC), then it will not be the responsibility of KPC but that of our Kuwaiti government and the rest of the GCC countries.
However, it simply doesn’t make any sense to build an export refinery when KPC is building the new export AlZour Refinery, which will be completed by end of 2017 and will cover the same outlets of our joint venture in Oman.
KPC’s policy calls for investing in consuming countries similar to the refinery in Italy, which serves our outlets in Europe, and our upcoming jointventure refinery in Vietnam, which only serves the domestic market with full consumption of the Kuwaiti crude oil.
KPC should try to find big consuming outlets in Asia like Indonesia, India and Pakistan with ongoing growth potential and total consumption of oil barrel.
The Oman refinery neither is in line with our oil policy nor fits our strategy, especially since Oman is self-sufficient, does not import petroleum products, has domestic consumption of 150,000 barrels per day and is surrounded by many oil and gas exporters.
Meanwhile, other countries in the Arabian Gulf region like Iraq and Iran are going to build new export refineries in order to enhance their return on crude oil. They will be directly competing with our existing refineries including the upcoming Duqm Refinery.
Once again, it just doesn’t make any sense to contradict the agreed Kuwaiti oil strategy.