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Kuwait Petroleum Corp tries to revive a pipeline lease-leaseback agreement

Kuwait's national oil company announced on Tuesday that it is looking to revive the project of leasing out its crude oil pipelines and then leasing them back. Kuwait joins Gulf counterparts like Saudi Arabia and United Arab Emirates who are leveraging private capital to acquire strategic energy assets.

Media reports last week citing sources familiar with the situation said that the company was considering leasing a part of its network to fund an investment plan covering everything from upstream and petrochemicals.

Kuwait Petroleum Corp, at a forum in Kuwait on Tuesday, did not disclose figures.

This move is similar to the lease-and-leaseback deals made in recent years by Saudi Aramco and Abu Dhabi National Oil Company, as well as Bahrain's Bapco Energies. These deals offer upfront cash for the payment of tariffs over time.

Kuwait's official news agency reported earlier this month that BlackRock will open a Kuwait office and have appointed Ali AlQadhi as the head of operations.

BlackRock's involvement in the potential KPC deal was not immediately apparent. BlackRock did no respond immediately to a comment request.

Kuwait Petroleum Corp announced in late 2023 that it would spend $410 billion between 2023 and 2040 to implement a strategy aimed at increasing production to 4 million barrels of oil per day.

Kuwait Gulf Oil Company (KPC), a KPC-owned subsidiary that operates in the Neutral Zone, shared with Saudi Arabia has made significant progress in the Dorra Gas Field Project in partnership with Saudi Aramco. Initial engineering designs have been completed, KPC said at the forum.

Kuwait also wants to implement a program to drill offshore oil explorations wells as part of an overall push to increase reserves and production capability. Reporting by Ahmed Hegagy. Writing by Tala RAMAdan and Sarah El Safty. Editing by Kirby Donovan and Ros Russel.

(source: Reuters)