Kuwait Bends the Rules

The Kuwait Oil Company (KOC) has offered an invitation to international oil firms to bid for development licenses for the northern oilfields in the second half of 2004.

The Kuwait government has already pre-qualified US companies ExxonMobil and Chevron Texaco and the UK's BP for the tender. Tthe foreign companies will have access to service contracts only
and will be paid in cash. Ownership rights would not be offered to international
operators.

The Kuwaiti constitution strictly prohibits foreign ownership of the state's
minerals. However, the government has been negotiating ways to involve foreign oil
companies in increasing oil production. In 2001, the government shook up KPC,
inserting reform minded board members as the government continues to work on
negotiations to open northern oil fields to foreign partnerships, although this has
faced stiff resistance in the National Assembly.