According to local media, the acting Kuwait oil minister has declared the intention of Kuwait Petroleum Corporation (KPC) to privatize four of its ten ‘K’ companies, namely Kuwait Oil Tankers Company (KOTC), Kuwait Petrochemical Industries Company (PIC), Kuwait Foreign Petroleum Exploration Company (KUFPEC) and Kuwait Petroleum International (Q8), of which about 20 to 30 percent of the shares will be offered for public subscription.
Industry sources claim to be unaware as to the real purpose behind such a move, whether it is financial for generating cash to reduce the state budget deficit or to genuinely encourage the private sector to be involved and gain experience in the energy business. Certainly, the low percentage of local participation is not clear for either purpose.
The first two companies — KOTC and PIC were 100 percent privately owned when established. The other two companies — KUFPEC and Q8 are the retail arms of KPC and observers say it is not the right time to sell them when the oil prices are low and will remain so for sometime.
Kamel Al-Harami, Independent Oil Analyst, says They will end up being sold cheaply. Q8 should remain intact as it is the solid base and core of Kuwait oil sector and should never be sold. In fact, selling it should never be an option as it is the marketing and dispensing outlet for more than 1.2 million barrels per day"
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