Kuwait Approves Consortia for Development Project

Kuwait's Supreme Petroleum Council has approved the formation of three international consortia bidding for a contract to increase oil production from Kuwait's northern oilfields, the Middle East Economic Survey reports in its Monday edition. SPC notified the companies on its acceptance of their composition on September 24th.

Under the terms of the consortia formation, each was to include only two operators. MEES said SPC accepted a request from ConocoPhilips to be downgraded from an earlier status of operator to a non-operator within the consortium led by ExxonMobil.

The approved three consortia are: ChevronTexaco; a leader with 50% stake, with Total SA 20%, PetroCanada 10%, Sibneft 10% and Sinopec, 10%.

In the second group BP is leading with a 65% stake, along with Occidental and a combination of ONGC and Indian Oil. Occidental would hold 25% of the group with the Indian companies holding 10%.

A third group, comprised of ExxonMobil with a leading 37.5% stake, Shell with 32.5%, ConocoPhillips with 20% and Maersk Oil with 10% share.

These companies are now expected to give their response to a draft operating service agreement and a development plan that they received from Kuwait Petroleum Corp. in June. Each company will explain its ideas on how to develop the northern fields, allowing KPC to evaluate all bids on a common basis.

Apart from submitting their reaction to the plan at the end of September, each consortium is scheduled to provide KPC with three different supplementary plans containing the views of the companies themselves on the fiscal structure, the pace of the development to be undertaken and the economics of the project.

KPC will decide whether any changes should be made to the original development plan as a result of the companies' recommendations. The plan, with any required modifications, will then become the potential bidding platform for the consortia, with tenders issued on its basis.