Kuwait may issue bonds to help fund $100bn oil investment

Kuwait Petroleum Corp is considering selling bonds to help pay for a planned investment of $100 billion over the next five years to boost oil output from OPEC’s fourth-biggest producer, according to the company’s chief executive officer.

State-run KPC is looking at issuing bonds and Islamic notes known as sukuk, Nizar Al-Adsani said at a conference in Kuwait City. KPC had announced plans earlier this month to arrange a $10 billion loan to expand refineries to make cleaner-burning fuels. Kuwait plans to expand its crude-production capacity to 4 million barrels a day by 2020, he said.

“The world market will need around 5 to 6 million barrels a day of new crude annually,” Al-Adsani said. “This shows the importance of continuity in investments in upstream globally for the sake of stable market supply and to avoid volatility and spikes in oil prices.” Kuwait will study other means of financing such as bonds, sukuk, and project bonds, he said. “This will open up the possibility for KPC to be rated by international credit agencies.”

Kuwait, with fellow Arab producers in the Persian Gulf including Saudi Arabia, led the Organisation of Petroleum Exporting Countries to abandon output limits on Dec. 4 amid efforts to squeeze higher-cost producers such as Russia and US shale drillers from the market. The small nation of 3.7 million people holds 101.5 billion barrels in crude reserves. Kuwait’s production rose by 50,000 barrels a day to 2.9 million barrels a day in December, according to data compiled by Bloomberg.

“KPC will continue in its role in the market as set in its strategy to 2030 which requires launching many mega-projects and investments in refining and petrochemicals outside of Kuwait, beside raising the daily crude production capacity,” Al-Adsani said.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Generation game: the struggle for power in the Gulf

Generation game: the struggle for power in the Gulf

The oil price decline has left a huge funding gap for the Gulf...

Rising sun: the Middle East's renewables revolution

Rising sun: the Middle East's renewables revolution

From one energy source to another, the Middle East is swiftly...

New Saudi energy minister shows he takes OPEC seriously

New Saudi energy minister shows he takes OPEC seriously

Khalid al-Falih turns up in Vienna, three days before the Organisation...

Most Popular
Most Discussed