Kuwait’s political crisis is undermining energy growth and options

Al-Monitor Pro Members

Gerald Kepes

President, Competitive Energy Strategies, LLC

May 17, 2023

Kuwait’s oil sector has had a 4 million barrel per day (mmb/d) crude production capacity target since 2010, if not before. In 2021, the date for achieving the goal was moved from 2020 to 2035. Meanwhile, capacity had declined to 2.8 mmb/d from 3.35 mmb/d. Kuwait Petroleum Corporation’s (KPC) upstream arm, Kuwait Oil Company (KOC), is clearly struggling to execute on this and other strategic objectives.      

An increasingly mature, technically complex upstream sector requires risk taking, higher spending and expanded capabilities. Increased investment in downstream/petrochemicals in an integrated energy sector requires timely execution. Yet KPC has experienced minimal growth in institutional capacity over the past three decades due to having zero strategic autonomy and limited operational autonomy. In order for results to change, either the political management of the energy sector or the design of the sector must change.