WATCHING THE WORLD HOW KPI RECOVERED

With Roger Vielvoye from London The program for the Aug. 28-31 Offshore Northern Seas (ONS) conference in Stavanger, published earlier this summer, proudly announced that the first speaker on the second day would be Nader Sultan, president of Kuwait Petroleum International (KPI). His subject: "Producer countries' downstream integration-the Kuwait story." Iraq's Aug. 2 invasion of Kuwait left ONS organizers wondering whether the Kuwaiti executive could take the time to fulfill his

Sept. 10, 1990

3 min read

The program for the Aug. 28-31 Offshore Northern Seas (ONS) conference in Stavanger, published earlier this summer, proudly announced that the first speaker on the second day would be Nader Sultan, president of Kuwait Petroleum International (KPI).

His subject: "Producer countries' downstream integration-the Kuwait story."

Iraq's Aug. 2 invasion of Kuwait left ONS organizers wondering whether the Kuwaiti executive could take the time to fulfill his speaking engagement.

As it turned out, Sultan, head of KPI's international refining and marketing operation, was in front of the microphones on schedule to receive the warmest welcome given to any speaker at the 4 day gathering.

AFTER THE FALL

The Kuwaiti executive confessed that his original notes for the presentation were not available. He had left them in Kuwait. Instead, Sultan, in his first public speaking engagement since the invasion, took the packed conference through life at KPI's London headquarters after the fall of Kuwait.

Not surprisingly, the days immediately after the invasion were the worst. Kuwaitis working in KPI's London office had to keep the business operational while trying to discover if families in Kuwait were safe and well. In these early days another of the problems for Sultan was the sheer number of calls from customers and well-wishers.

Communications with the staff in KPI's European operations that extend from Sweden in the north to Italy in the south were extremely important. Managers in the affiliates needed to be assured that revenues were not being repatriated to occupied Kuwait.

The managers also were assured there would be no immediate supply problems because KPI had more than 3 months of crude supply at sea. Continuity was ensured by deals with other suppliers. In fact, the company is cash rich because no payments will be made to Kuwait for this oil.

KPI also took over the role of accounting for cargoes, bought by non-Kuwaiti companies on 30 day credit, that had left Kuwait from the beginning of July. The real problem for the London office was the lack of lifting records. Detective work using the company's Christmas card list eventually identified 120 buyers of crude and products.

NOT EVERYONE HELPED

Sultan revealed that not everybody was helpful.

Some shipowners tried to take advantage of the situation by demanding payment in advance before cargoes would be unloaded. Demands for advance payment of demurrage charges also were difficult to satisfy without proper records.

Some customers were suspicious of invoices from KPI, and backup letters were required from Kuwaiti embassies in various part of the world to establish credentials of the London office. The whole process was made more complex by edicts in a number of countries that froze Kuwaiti assets to keep them from being plundered by Iraq.

In a short question and answer session, Sultan forecast that once Iraq is forced out of Kuwait and the legitimate government restored, the state will become more closely allied with the West. And this might lead to joint ventures in Kuwait with foreign companies.