Kuwait To Assess Investments in Energy Sector

OPEC-member Kuwait plans to spend $55 billion on its oil sector over the next five years to overhaul existing infrastructure and build new capacity.

"There is no doubt that declining oil prices is affecting the whole world and not just Kuwait... There is a study to assess the next plan and its priorities," Mohammed Al-Olaim, Kuwaiti oil minister, told reporters on Monday, when asked if Kuwait will revise its five-year investment plan for the oil sector. "We have strategic goals which we will keep... no doubt about that," he added.

In calculating its 2008/09 budget, Kuwait has assumed its crude, the country's main revenue earner, would fetch $50 a barrel in the year to March 31. But Kuwaiti crude plunged to $35.62 a barrel on Friday.

Oil rose towards $43 a barrel on Monday, partly inspired by a weaker US dollar and comments from Saudi Arabia that OPEC supply cuts will succeed in stabilising the market. Olaim said it is still early to judge the effect of OPEC's latest output cut on oil prices.

"The last decision is a good one, but the surplus in the market cannot be contained by one decision. The decision needs time," Arabian Business.com cited him saying. "We are affected by the global financial market and the global economy's direction is still not good and no doubt that this affects demand level for oil."

Author: Ksenia Kochneva