Kuwait May Issue Sukuk Amid &100b Oil Investment Over Five Years

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 10bn loan to expand refineries to make cleaner-burning fuels. Kuwait plans to expand its crude-production capacity to 4mn bpd by 2020, he said.
“The world market will need around 5mn to 6mn bpd 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 othe 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 Gulf including Saudi Arabia, led the Organisation of Petroleum Exporting Countries to abandon output limits on December 4 amid efforts to squeeze higher-cost producers such as Russia and US shale drillers from the market. The small nation of 3.7mn people holds 101.5bn barrels in crude reserves. Kuwait’s production rose by 50,000 bpd to 2.9mn bpd 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.