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Kuwait says emir death won’t change oil policy

Kuwait will maintain its oil policy aimed at keeping global markets supplied, and the OPEC producer’s energy operations have not been affected by the death of its ruler, Kuwaiti oil officials said on Sunday.
Kuwait Stock Exchange sits empty as Kuwait starts three days of official mourning for the death of the Emir Sheikh Jaber al-Ahmad al-Sabah in Kuwait.
Kuwait Stock Exchange sits empty as Kuwait starts three days of official mourning for the death of the Emir Sheikh Jaber al-Ahmad al-Sabah in Kuwait.
/ Source: Reuters

Kuwait will maintain its oil policy aimed at keeping global markets supplied, and the OPEC producer’s energy operations have not been affected by the death of its ruler, Kuwaiti oil officials said on Sunday.

Emir Sheikh Jaber al-Ahmed al-Sabah died on Sunday after a long illness, and the Gulf Arab state's cabinet named his heir, Crown Prince Sheikh Saad al-Abdulla al-Sabah, as the new emir.

Senior officials at government-run Kuwait Petroleum Co (KPC) and state refiner Kuwait National Petroleum Co (KNPC) said oil sector operations were normal, including refining and exports.

"Kuwait's (oil) policy will not change. It will continue to cooperate with OPEC in the interest of both producers and consumers," an official, who declined to be named, told Reuters.

Kuwait, a major producer in the Organization of the Petroleum Exporting Countries, is pumping close to its production capacity of 2.7 million barrels per day (bpd). It controls about 10 percent of global oil reserves.

"Oil sector projects are proceeding normally, without any impact from the grave calamity which has afflicted Kuwait and its people," KPC CEO Hani Hussein told state news agency KUNA.

Sami Rushaid, who heads KNPC, told KUNA: "The ... death of the emir will not impact the oil refineries or export operations, and they continue at normal levels."

Kuwait has three oil refineries, with a total crude processing capacity of up to 930,000 bpd.

Farouk al-Zanki, head of Kuwait Oil Co (KOC), which oversees the upstream sector, said exploration operations were also proceeding on schedule. But he said KOC would shut down for three days to mourn the emir, like all state agencies.

Oil Minister Sheikh Ahmad al-Fahd al-Sabah said at last month's OPEC meeting that Kuwait, which has a formal OPEC quota of 2.247 million bpd, would continue to meet the needs of global oil markets.

The ill health of Saad has caused concern at home and abroad over the future leadership of U.S. ally Kuwait. But analysts say they expect Saad to be a figurehead, while Prime Minister Sheikh Sabah al-Ahmad al-Sabah will effectively run the country, as he has for the past four years.

"The country has been run by Sheikh Sabah for years. Policy will remain stable. It will not be affected by any change in the guard," former Kuwaiti oil minister Ali al-Baghli told Reuters.

Kuwait's government is trying to push through parliament the $8.5 billion Project Kuwait, involving multinationals to upgrade four major northern oilfields to help boost its output capacity.

"The country has set a long-term oil strategy which will not change. It is committed to increasing production capacity to meet the needs of the oil markets," Baghli said.

"Project Kuwait will eventually pass after parliament adds the legal touches and some regulatory restrictions on the government," he said.

Several MPs have objected to the plan in its current form, and the parliament is due to hold a special session on January 23 to discuss the long-awaited project, which has been under discussion since the early 1990s.

International consortiums led by BP, Exxon Mobil Corp and Chevron Corp are competing for the project. The investment contract would allow firms to operate the fields for a fixed period, but would not involve production-sharing, concessions or the booking of reserves.

Kuwait says the plan is strategically important to help boost output, but some in parliament say it does not provide guarantees to safeguard the country's oil wealth.