WATCHING THE WORLD REBUILDING KUWAIT

With Roger Vielvoye from London The multimillion dollar investment that may be needed to restore Kuwait's social and industrial infrastructure has companies from around the world presenting their credentials to the Kuwaiti authorities. But the Kuwaiti government in exile has already made it clear companies from nations in the coalition fighting to free Kuwait will be awarded almost all of the business, starting with contracts worth $700-800 million to restore essential services.

Feb. 25, 1991

3 min read

The multimillion dollar investment that may be needed to restore Kuwait's social and industrial infrastructure has companies from around the world presenting their credentials to the Kuwaiti authorities.

But the Kuwaiti government in exile has already made it clear companies from nations in the coalition fighting to free Kuwait will be awarded almost all of the business, starting with contracts worth $700-800 million to restore essential services.

Ibrahim Majid al-Shahin, director of the Kuwait Emergency Recovery Program, said 171 foreign companies have signed contracts for top priority work in the first 3 months after liberation. About 75% of these companies are from the U. S.

Working alongside the organization for masterminding the recovery of services, state owned Kuwait Petroleum Co. is reportedly close to signing contracts for a similar reconstruction of the oil and gas business.

BECHTEL'S ROLE

Bechtel Group confirmed its U.K. office that normally manages its Middle Eastern business is involved in discussions with KPC about restoration of oil and gas facilities but added that a contract has not yet been signed.

In the past, Bechtel's major Middle Eastern contracts have been run from London, and substantial volumes of work have been subcontracted to U.K. affiliates of other U.S. contracting companies as well as U.K. owned companies.

Within the British contracting industry, it is expected that the U.K. units of McDermott, Fluor Daniel, and Foster Wheeler will also benefit from rebuilding Kuwait's oil industry through contracts with Bechtel.

Bechtel's work is likely to fall into two categories. Once the fighting is over, the company will be responsible for a comprehensive assessment of the war damage followed by establishment of a list of priorities to get production of crude oil restored and refineries back on stream. The company will then be responsible for overseeing reconstruction work.

KPC is also in the final stages of negotiating service contracts with four U.S. firefighting companies: Red Adair, Wild Well Control, Boots & Coots, and Safety Boss.

So far none of the prospective contract winners has any real idea of the amount of work that will be required.

LATEST DAMAGE ASSESSMENT

The latest assessment of damage from KPC identified 18 well fires, six in giant Burgan field and 12 in the northern fields. In addition, four gathering centers are burning and have been damaged considerably. Whether the fires were started by the Iraqis or by allied bombing is not certain.

Kuwait's three refineries have so far only experienced marginal damage to storage facilities and from activities of the Iraqis, who have stripped out computer control systems and seized the entire inventory of spare parts including all refinery chemical stocks.

However, industry sources are certain that if the land war begins, the refineries on the coast between the Iraqi defense lines on the border with Saudi Arabia and Kuwait City will be damaged further.