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Kuwaiti oil minister confident about refinery support

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 16 -- Kuwaiti Oil Minister Mohammad al-Olaim, rejecting allegations that he had violated any laws in the award of contracts, expressed confidence he would win parliamentary support to construct the 615,000 b/d Al-Zour refinery.

"There was relief among the members of the committee over data presented by the ministry," said al-Olaim after briefing parliament's key financial committee for 5 hr. "All the steps taken…were legal and transparent," al-Olaim said.

Members of parliament had demanded an investigation after state-owned Kuwait National Petroleum Co (KNPC) awarded contracts worth $8.4 billion to Japan's JGC Corp and South Korea's GS Engineering & Construction Corp., after a tender.

Al-Olaim also came under pressure from some parliamentarians who alleged other violations, particularly in connection with the award of a utility and offsite services package without a tender to US engineering firm Fluor.

The main objections came from Kuwait's Popular Action Bloc which insists that the bidding process and awarding of contracts must go through the Central Tenders Committee and that oil projects are no exception.

In August, al-Olaim refuted legislators' claims of any wrongdoing in the award process for the al-Zour refinery project, and said he would make some documents on the tenders available for inspection (OGJ Online, Aug. 17, 2008).

Kuwait has announced plans to increase refining capacity to 1.415 million b/d from the current 930,000 b/d with the new plant along with upgrades to two existing refineries. Al-Zour is scheduled to start operating in 2012, two years later than initially planned.

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